Blog Category: 409a Valuation

Gain a comprehensive understanding of 409a valuation. Explore various topics, including 409a valuation methodologies, regulatory compliance, and industry best practices. Stay up to date with our insights and expert guides.

5 Most Trusted 409A Valuation Firms in 2025

The 409a Valuation service market was worth USD 10.9 billion in 2023 and is projected to be worth USD 40.3 billion by 2030, growing at a CAGR of 12.9% from 2024 to 2030. This market is a subset of the financial services business that concentrates on helping private corporations meet the requirements of Section 409A … Continued

Section 409A: Impact on LLC Incentive Compensation?

Section 409A of the Internal Revenue Code (IRC) deals with certain deferred compensations. Most businesses know that they need to get a valuation if they want to issue employee stock ownership plans (ESOPs). However, the Section also deals with non-stock deferred compensations like bonuses and performance-linked incentives. So, even limited liability corporations (LLCs) that cannot … Continued

What is 409a Refresh?

Suppose your company previously valued its stock at $10 per share on January 1, 2023. Following a Series A funding round on July 1, 2023, which valued the company at $20 million pre-money, the company conducted a 409A refresh. An independent valuation firm determined the new fair market value (FMV) to be $15 per share, … Continued

How does a 409A Valuation Ensure Tax Compliance?

In the pursuit of hiring talented executives and conserving cash, stock options can lead to win-win situations for everyone involved. However, hefty penalties are involved when you do not comply with tax laws. With stock options, the tax liability depends primarily on the purchase price. You must derive this price by conducting a 409A valuation … Continued

Securing Safe Harbor Status for Fintech Startups

For centuries, safe harbors have given sailors respite from the most unforgiving seas. Today, the concept of safe harbors extends far beyond the seven seas. In the stock market, safe harbor assets help investors take shelter from market volatility. Similarly, in the winding and treacherous landscape of tax regulations, safe harbors offer certainty and stability. … Continued

A History Of 409A Valuations

Enron was an energy, commodities, and services company whose shocking malpractices shook the foundations of corporate America. The outcry of this scandal was so immense that it spawned various laws for raising the accounting standards for US companies, including the American Jobs Creation Act that introduced 409A regulations. These regulations govern the taxation and administration … Continued

Impact of Market Volatility on 409A Valuations

If your company has an urgent need to hire talent, you might actually welcome market volatility with arms wide open. Why? Well, market volatility can reduce valuations. Investors will be uncertain about your company’s value and they will want a better risk premium for their funds. But, if you issue stock-based compensation at this point, … Continued

409A Valuation Index and Trends By Industry (2024)

You may want to reward your hard working team with stock options. When you do so, you must stay on the right side of the IRS and get a 409A valuation. Such a valuation determines your company’s fair market value (FMV), based on which you can issue employee stock ownership plans (ESOPs) and other stock-based … Continued

The Founder Guide to 409a Valuations in 2024

The 409A Valuation Services market was valued at USD 10 billion in 2023 and is projected to grow to USD 40.5 billion by 2031, with a compound annual growth rate (CAGR) of 12.9% from 2024 to 2031. A 409A valuation has been an indispensable and crucial assessment for a startup when issuing stock options or … Continued

Why is Eqvista 409a valuation expertise the best in the market?

A 409A valuation is crucial for private companies as it determines the fair market value of their common stock. It’s a mandatory process that any private company should undergo to comply with IRS regulations.  As ESOP becomes the popular employee compensation means, the need for a 409a valuation has become more pressing. Finding a reliable … Continued

IRS Section for Non-Qualified Deferred Payment (2024 Updates)

While NQDC audits declined in recent years, the updated guide and the IRS’s request for substantial budget increases suggest heightened enforcement may be forthcoming. If enacted, a proposal in the Biden administration’s budget would also require employers to withhold Section 409A penalties from employees’ pay starting in 2024. IRS recently updated the Nonqualified Deferred Compensation … Continued

Who conducts a 409A Valuation?

In every startup operation, a moment arrives when a founder must secure a 409A valuation, a crucial step that seems daunting. This valuation is pivotal, as it determines the fair market value of a startup’s common stock, directly influencing stock option grants, potential funding rounds, and tax implications. It raises a pressing question: Who has … Continued

409a Valuations and Non-US Companies

Companies outside the U.S. may require a 409A valuation for various reasons when entering the U.S. market. This situation often occurs when providing stock options or other equity-based compensation to employees in the United States, a popular strategy to attract and retain skilled professionals.  Startups and established companies must determine these valuations to motivate their … Continued

Is 409A Valuation Mandatory?

A 409A valuation is crucial for private companies in 2024 to ensure fair practices, comply with tax laws, and foster sustainable growth by accurately valuing their common stock. Many founders question the need for a 409A valuation, weighing its importance against startup costs and efforts.  However, opting for a valuation more than once a year … Continued

How do I check My 409A Valuation report?

Understanding the 409A valuation report is critical for owners as their funding strategy, yet many admit to needing help with its complexities. Whether founders and investors use online platforms or traditional consultancy services for their valuation needs, a clear idea of the 409a Valuation report is vital. With more and more startups relying on stock … Continued

Get Two Free 409a Valuations and Experience Our Outstanding Valuation Process

Since 2018, Eqvista has strived to bring sophistication and technology to equity management. We wanted to provide access, affordability, and benefits to companies of all sizes. Fast forward to 2023, we are now trusted by over 15,000 businesses for cap table management, 409a valuation services, and IRS filings, and now emerging as leaders in the … Continued

409A Valuation at $89 a month for Startups Affected by SVB Failure

The SVB fiasco is the talk of the business town now. Silicon Valley Bank financed startups beyond the Bay Area. It supported half of all US venture-backed firms and 44% of US venture-backed healthcare and technology companies that went public in 2022. SVB may reveal its risk management and other procedures, which have caused many … Continued

Stripe 409A Valuation Cut: What it Means for the Tech Industry?

Stripe Inc. headquartered at San Francisco is a financial services and software as a service (SaaS) company founded by John and Patrick Collison in 2009. It provides payment software services to US Customers. According to a report, Stripe reduced the “internal value” of its shares by nearly 11% in the most recent revision, dropping it … Continued

When do South Korean companies need a 409A valuation?

Section 409A is a valuation that determines the fair market value of a private company’s common share. A South Korean company may need a 409A valuation if they are going public, establishing stock-based compensation, or are planning a merger, acquisition or other significant transaction. 409A valuation in South Korea is done by independent third-party valuation … Continued

Is a 409A Valuation Needed for Convertible Notes or SAFE Notes?

Following the Enron scandal of 2001, the government demanded corporations correctly value stock options granted to employees. Section 409a of the tax code requires startups to undertake regular audits to determine the value of the common shares they give out as options to their employees. A firm typically completes its first 409A valuation after raising … Continued

Interested in issuing & managing shares?

If you want to start issuing and managing shares, Try out our Eqvista App, it is free and all online!