409a Valuation Startup
Free
September 30, 2025
Canada
1
Description
A 409A valuation for a startup is an independent appraisal of a private company’s common stock, required for setting the strike price of stock options. It ensures compliance with IRS regulations, helping avoid tax penalties for employees. Startups use 409A valuations to determine fair market value during fundraising, equity grants, or mergers. The process considers financial performance, market trends, comparable companies, and future growth potential. Regular updates—typically every 12 months—are crucial as startups evolve rapidly.
Useful information
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