For private startups with a stock option plan: upload your cap table and financials, answer a short questionnaire, and get an independent valuation of your common stock for option grants — with a refresh after a new financing round included in the year.
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Seed-stage startup, 14 employees, SAFE notes and an option pool. Cap table and financials uploaded on Monday, questionnaire completed on Tuesday. Valuation report delivered, summary ready for the board meeting. Eleven months later — reminder to refresh before new grants.
Choose your stageA private company that grants stock options to employees needs to set the exercise price at or above the fair market value of its common stock. Under Section 409A of the Internal Revenue Code, an independent appraisal is the usual way to support that value, and most startups refresh it at least once a year and after every financing round. Without a current valuation, option grants can create tax problems for employees.
Valuation providers sell this as an annual service: even for pre-revenue companies it is a recurring yearly cost. 409A Annual offers the same work at a fixed price by stage, with a clear process and a reminder before the valuation expires.
You start by uploading the cap table, the latest financial statements, a short forecast and the documents of your financing: SAFEs, convertible notes or preferred stock terms. A questionnaire collects the rest — the product stage, the market, recent events and secondary sales, if any.
A qualified appraiser prepares the valuation using the methods appropriate for your stage, and delivers a report with the fair market value of common stock and the reasoning behind it. You receive a short board-ready summary to approve option grants at that price.
If you close a priced round or another material event happens during the year, a refresh is included: you upload the new documents and receive an updated report. Before the twelve months run out, the service reminds you that a new valuation is due, so grants are never priced on an expired report.
All reports stay in one place with their dates, so your lawyer, auditor or a future investor can see the valuation history in minutes.
Most startups use the service from the first option grant until a later round, when a larger valuation firm or an audit may be needed.
A typical year looks like this. The first valuation is prepared before your first option grants. During the year, if you raise a priced round, you upload the new documents and the valuation is refreshed. Eleven months after the report date, you get a reminder, and the next annual valuation starts from the information already on file, so you only update what changed.
Founders often find that the hardest part of a 409A is collecting the documents. The questionnaire asks only for what the appraiser needs, explains each item in plain words, and saves your answers for next year.
409A Annual does not give tax or legal advice. The board decides the exercise price; consult your counsel for grant decisions.
A qualified independent appraiser, using methods appropriate to your stage.
Yes, one refresh after a priced round or material event within the year.
Cap table, financial statements, a short forecast and the documents of your financings.
No. The board decides the exercise price; consult your counsel.
Not yet. The service is in preparation, and we are checking whether startups need it.