409A Valuation Reports for Startup Equity
409.AI helps startups prepare expert-reviewed 409A valuation reports for common stock FMV, employee option grants, and equity planning workflows.
What is included
- Company information and valuation intake context
- Cap table and accounting information supplied by the company
- Common stock fair market value analysis
- Draft report review opportunity
- Expert-reviewed final valuation report
Frequently asked questions
What is a 409A valuation?
A 409A valuation is an independent appraisal of a private company's common stock fair market value. Companies use it to set tax-compliant stock option strike prices under Section 409A of the US Internal Revenue Code and to support IRS safe-harbor treatment.
How much does a 409A valuation cost?
409.AI 409A valuation reports start at $899 USD. Pricing is tiered by how much capital your company has raised, and current pricing is shown on the pricing page.
How long does a 409A valuation take?
409.AI delivers a draft report in about 24 hours after intake is complete. The final expert-reviewed report is delivered in 7 business days on the standard timeline, with 1 or 3 business day express delivery available as an add-on.
How long is a 409A valuation good for?
A 409A valuation is generally valid for up to 12 months, or until a material event such as a new financing round occurs, whichever comes first. After a material event, a new valuation is typically needed.
How often do you need a 409A valuation?
While you are granting stock options, you generally need a fresh 409A valuation at least every 12 months and again after any material event that could change the company's value.
Are 409A valuations public?
No. A 409A valuation is a private report prepared for the company and its board to support option pricing. It is not filed publicly or disclosed the way public-company financials are.
Do I need a 409A valuation?
If you are a private company granting stock options or issuing common stock to employees, you generally need a 409A valuation to set a defensible strike price and qualify for IRS safe-harbor protection.
How is a 409A valuation calculated?
A 409A valuation estimates the company's enterprise value, then allocates it across share classes using an option pricing model (OPM), typically calibrated to the most recent financing through a backsolve. A discount for lack of marketability (DLOM) is applied using recognized models such as Finnerty and Chaffe.
What is the difference between a 409A valuation and ASC 718?
A 409A valuation sets the fair market value used for option strike prices. ASC 718 uses grant-date fair value to record stock-based compensation expense in financial statements. They rely on related analysis but serve different purposes, and many companies need both.
I've done a 409A elsewhere before or never completed one before, is that okay?
Of course! During the onboarding flow it will ask you to submit previous valuations so we can continue where you left off! First-time valuations are also welcome and you can skip this question.
What if I am not happy with my valuation?
If you have any concerns once you receive the report, you will be given the option to book a call with our team to discuss. We pride ourselves on fairness and will not adjust the valuation unless there is a clear, supported reason why. As these reports must be IRS defensible, we reserve the right to withhold from making any changes.
How do I know if I'm too early or too large for a 409A?
There is no stage too early for a 409A. We look at a variety of valuation methods and choose which is right based on the information provided. As companies grow, different valuations are used ensuring there is no company too large or too small.
I'm not sure if my information in my accounting software or cap table is accurate, should I still complete this?
No, definitely not. Just like submitting any other legal document, the onus for ensuring the information provided is accurate is on you. If our team sees incorrect or misleading information has been provided, we will not complete the valuation for your company. Integrity and fairness are at the core of our values.
What if I need audit defence?
Audit defence is available for an hourly fee of USD $175/hr. In this scenario, you would work directly with one of our valuation experts to complete the audit components together.