What is 409A Valuation?
409A Valuation
A 409A Valuation is an independent appraisal of a private startup's common stock value, required by IRS Section 409A to set tax-compliant option strike prices.
Why It Matters for Startups
Directly dictates the cap table and dilution structure during fundraising; understanding 409A Valuation helps founders model equity distributions when structuring rounds for irs tax code compliance audits.
Detailed Deep Dive
A 409A Valuation is an independent appraisal of a private startup's common stock value, required by IRS Section 409A to set tax-compliant option strike prices.
Frequently Asked Questions
Q:How often must a startup get a 409A valuation?
Every 12 months, or immediately following any event that materially affects the company's value (like a funding round).
Q:What happens if a startup sets option prices without a 409A?
Employees can face massive tax penalties, interest charges, and audit fines on their option grants.
Quick Facts
- CategoryFunding
- Key ApplicationIRS tax code compliance audits
Coverage Trend12 Weeks
Related Startup Terms
Cite This Term
Reference this definition in your articles, research, or documentation to credit this source:
409A Valuation Media Coverage & Intelligence
No Direct 409A Valuation News Today
We currently have no direct coverage articles matching "409A Valuation". Explore trending global startup topics below instead.
Trending Startup Stories
How to bring your software delivery workflow into GitHub with agent apps
See how four GitHub agent apps can help you scope, secure, roll out, and ship a feature across the SDLC-all without leaving GitHub. The post How to bring...
Universitas Gadjah Mada, Indosat and NVIDIA Open Indonesia's First University AI Center to Develop Local AI Talent
Indonesia is taking charge of its AI future. This week, the Ministry of Communication and Digital Affairs (Komdigi), Indosat Ooredoo Hutchison (Indosat or...
How Cloudflare detects MCP traffic and helps secure it
Cloudflare Gateway identifies MCP requests using protocol-level heuristics. Security teams can use that signal to find shadow MCP traffic, enforce...
Building agentic workflows with SageMaker AI and Bedrock AgentCore
Learn how to combine OpenAI-compatible endpoints on Amazon SageMaker AI with Amazon Bedrock AgentCore runtime to build a multi-agent workflow where each...