Material Event
A material event is when your company undergoes a change that would affect the share value of the business.
A material event is when your company undergoes a change that would affect the share value of the business. Material events are pivotal situations or changes to the business that would dramatically shift the valuation (value) of the company, which is also why there is a need for a 409A valuation when this happens. Material events include, but are not limited to:
- An event that materially alters the corporate structure and/or tax structure of the company. For instance, the change of the company from a for-profit to a non-profit business.
- After funding events using convertible debts, sale of preferred or common shares.
- Qualified funding event that many startups encounter where ownership is given in exchange for funding to the investor
- A merger, acquisition, or both with another company
- Significant secondary sale of company stock
To know more about material events or other things associated with it, check out the support center here or contact us!
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