Series C and Growth Stage 409A Valuations

Methodology shifts toward scenarios

When an exit becomes foreseeable, a probability-weighted expected return method or a hybrid approach often replaces a pure option pricing model. Instead of treating value as a single continuous distribution, the model weights specific outcomes such as an IPO, an acquisition, or continued private operation.

Scrutiny increases

Growth stage companies usually have audited financials, institutional investors on the board, and in many cases the beginnings of IPO preparation. Documentation quality matters more here than at any earlier stage, because more parties will review it.

What it costs

Series C and growth stage companies typically fall in the $2,999 to $3,499 tiers depending on total capital raised. Every report includes your first 2 hours of audit support, so if an auditor or the IRS asks how a number was derived, someone who worked on it answers.

Frequently asked questions

What is the difference between OPM and PWERM?

An option pricing model treats share classes as call options on enterprise value and works well when the exit is distant and uncertain. A probability-weighted expected return method models discrete exit scenarios and their timing, which fits better when an exit is foreseeable. Hybrid approaches combine both.

How does IPO preparation affect the 409A?

As an IPO becomes more likely the marketability discount narrows, and in IPO scenarios preferred stock typically converts to common and shares ratably, so common stock value moves toward the preferred price. Valuations also tend to be scrutinized more closely in the run-up, since the gap between the 409A and the expected offering price attracts attention.

How often do growth stage companies refresh?

At least annually, and in practice more often, because material events such as new rounds, secondaries, and significant forecast changes occur more frequently at this stage.