AI-Powered 409A Valuations — Built for Modern Startups
An automated valuation platform that delivers compliant, defensible 409A reports — faster and more efficiently than traditional firms.
Reviewed by independent valuation professionals • Secure & confidential
What is a 409A Valuation?
A 409A valuation is an independent appraisal of the fair market value (FMV) of a private company's common stock. Named after Section 409A of the Internal Revenue Code, this valuation is essential for any company that issues stock options or other equity compensation to employees, contractors, or advisors.
Without a proper 409A valuation, companies risk issuing stock options below fair market value, which can trigger significant tax penalties for option holders—including immediate income tax on unvested options and a 20% additional tax penalty.
Our 409A valuation service provides the independent, qualified appraisal your company needs to establish safe harbor protection and ensure compliance with IRS regulations.
When You Need a 409A Valuation
- Before granting your first stock options
- Every 12 months to maintain compliance
- After closing a new funding round
- Following a material business event
- Before an M&A transaction or IPO
An Automated 409A Process — With Human Oversight Where It Matters
Upload Company Data
Cap table, financials, and company details
AI Valuation Engine
Automated modeling, benchmarking, and scenario analysis
Independent Expert Review
Professional valuation sign-off for defensibility
Final 409A Report
Audit-ready, compliant, and investor-grade
Why Startups Are Moving Beyond Traditional 409A Firms
Traditional valuations rely on manual workflows, long back-and-forth cycles, and pricing that doesn't scale with early-stage companies. Our platform replaces most of that friction with automation.
Traditional 409A Firms vs. an AI-Driven Platform
| Traditional Valuation Firms | AI-Powered Platform | |
|---|---|---|
| Process | Manual, consultant-led | Automated with expert review |
| Timeline | 2–4 weeks | Hours |
| Founder Effort | Repeated back-and-forth | Structured, guided workflow |
| Cost Structure | High, fixed fees | Lower, predictable pricing |
| Consistency | Varies by analyst | Standardized modeling |
| Compliance | IRS 409A | IRS 409A |
| Audit Defensibility |
AI enhances speed and consistency — professional oversight ensures compliance and defensibility.
"Having overseen global tax and valuation matters for both public and private companies, I value solutions that reduce friction without compromising rigor or compliance. This platform delivers a thoughtful, modern approach to 409A valuations—combining automation, standardized methodology, and expert oversight to produce faster, more efficient, and audit-ready outcomes."
David Whitefield
Former Head of Global Tax, NICE (NASDAQ: NICE)
Former CFO of Gravyty
Who Needs a 409A Valuation?
If your company issues stock options or equity compensation, you likely need a 409A valuation to stay compliant with IRS regulations.
Early-Stage Startups
Pre-seed and seed-stage companies preparing to issue their first stock options to founders, employees, or advisors.
Venture-Backed Companies
Series A through late-stage companies that need updated valuations after each funding round or material business event.
Private Companies
Established private businesses using equity compensation as part of their employee retention and recruitment strategy.
Pre-Exit Companies
Companies preparing for an acquisition, merger, or IPO that need current fair market value documentation.
Built for Compliance, Not Shortcuts
Every valuation is prepared in accordance with IRS Section 409A safe-harbor principles and reviewed by qualified valuation professionals.
- Independent appraiser review
- Defensible methodologies
- Secure data handling
- NDA available upon request
Frequently Asked Questions About 409A Valuations
Everything you need to know about 409A valuations and our service.
What is a 409A valuation and why do I need one?
A 409A valuation is an independent appraisal of your company's common stock fair market value, required by IRS Section 409A. You need one to issue stock options at fair market value, which protects your employees from significant tax penalties and your company from potential IRS issues. Without a proper 409A valuation, option holders could face immediate taxation on unvested options plus a 20% penalty tax.
How often do I need to update my 409A valuation?
Generally, a 409A valuation is valid for 12 months. However, you'll need a new valuation sooner if a "material event" occurs—such as closing a new funding round, significant changes in revenue or customer base, launching new products, or any event that substantially affects your company's value. Most venture-backed startups get a new 409A valuation after each funding round.
What is safe harbor protection and how do I get it?
Safe harbor protection means the IRS will presume your stock option exercise price is at fair market value if your valuation meets certain requirements. To qualify, your 409A valuation must be performed by a qualified independent appraiser using accepted valuation methods. Our valuations are specifically designed to meet all safe harbor requirements, protecting your company from IRS challenges.
How is fair market value determined in a 409A valuation?
Fair market value is determined using multiple valuation methodologies, typically including the market approach (comparing to similar company transactions), income approach (discounted cash flow analysis), and asset-based approach. For startups, we also consider recent funding rounds, applying appropriate discounts for lack of marketability and comparing common stock to preferred stock terms.
What documents do I need for a 409A valuation?
Typically, you'll need to provide your cap table, recent financial statements (balance sheet and income statement), any recent funding documents or term sheets, board meeting minutes, and information about your business model and projections. Our platform guides you through exactly what's needed and makes uploading documents simple and secure.
How long does it take to get a 409A valuation?
With our AI-powered platform, you can receive your completed 409A valuation report in days rather than the 2-4 weeks typical of traditional 409A valuation providers. The exact timeline depends on how quickly you can provide the required documents and the complexity of your cap table and business structure.