Valorega’s 409A Valuation Solutions empower startup founders, CFOs, and HR leaders to set fair, defensible stock option prices in line with IRS Section 409A requirements. Our offshore valuation specialists combine industry best practices, proven valuation frameworks, and secure delivery processes to give you investor-grade, audit-ready 409A valuations quickly and cost-effectively. Avoid compliance penalties and build trust with employees and investors through robust, independent fair market value analyses.
What is a 409A Valuation?
A 409A valuation establishes the fair market value (FMV) of a private company’s common stock to set option strike prices for employees and founders. Conducted under the IRS’s Section 409A safe harbor rules, these valuations protect against tax penalties, ensure compliant equity compensation, and provide transparency to employees, boards, and regulators.
High-quality 409A valuations leverage rigorous models, market comparables, and industry data — supporting defensibility under IRS or audit scrutiny.
Business Challenges We Solve
- Risk of IRS penalties from mispriced options
- Outdated or poorly supported valuation reports
- Limited in-house expertise in 409A frameworks
- Tight stock grant deadlines for new hires or option refreshes
- Complex multi-class share structures
- Pressure from auditors or investors for robust assumptions
- Disconnected finance and HR teams managing equity grants
- High costs from traditional valuation consultants
How Valorega Delivers 409A Valuation Solutions
We combine:
- Skilled offshore valuation experts familiar with IRS safe harbor methodologies
- Best-practice approaches using income (DCF), market comps, and option pricing methods
- Benchmarking with current market and investor data
- Scenario modeling and sensitivity analysis
- Comprehensive supporting documentation for audit readiness
- Secure data handling with NDAs and role-based access
- Founder-led oversight to ensure consistency and quality
- Flexible capacity for periodic or event-driven revaluations
Our solutions deliver credible, defendable 409A valuations you can trust.
Why Choose Valorega
- Deep understanding of IRS Section 409A frameworks
- Proven investor-grade financial modeling
- Secure offshore delivery with strict data confidentiality
- Transparent, well-documented assumptions
- Strong relationships with auditors and compliance advisors
- Flexible turnaround for tight grant deadlines
- Founder-led client oversight
- Competitive pricing compared to traditional US-based firms
- Robust scenario and dilution analyses
- Periodic update support as your business grows
Who We Serve
- Startup founders issuing new option grants
- CFOs of growth-stage businesses
- Private equity–backed portfolio companies
- VC-backed companies preparing for future funding rounds
- Board members and compensation committees
- HR teams managing employee stock plans
Our Proven Engagement Process
1
Discovery & Scope Assessment
Gather cap tables, share class details, and company financials
2
Solution Design & Onboarding
Define valuation methods, scenarios, and reporting requirements
3
Modeling & Valuation
Apply DCF, market comparables, and option pricing frameworks
4
Review & Finalization
Deliver a robust, audit-ready 409A valuation report
Key Areas We Cover in 409A Valuations
1
Common Stock FMV Estimation
Determine fair market value for employee grants
2
Option Pricing Models (OPM)
Account for complex share structures, liquidation preferences, and volatility
3
Market Benchmarking
Use investor-backed comparable data to support valuations
4
Scenario & Sensitivity Analysis
Model best/worst/mid-case value outcomes
5
Discount for Lack of Marketability
Incorporate discounts for private company illiquidity
6
Cap Table Analysis
Review share classes, preference stacks, and option pools
7
Compliance Documentation
Deliver reports with audit-ready supporting data
8
Periodic Refresh
Support annual or event-driven revaluations to stay current
Benefits of Valorega’s Strategic Finance Approach
- Comply with IRS Section 409A safe harbor requirements
- Protect against penalties and audit challenges
- Build employee and investor trust through transparent FMV
- Support fast option grants with efficient turnaround
- Reduce costs compared to traditional valuation providers
- Flexible offshore resources for periodic updates
- Seamless integration with HR and finance teams
- Defensible documentation for board approvals and auditors
- Strong governance and data security frameworks
- Founder-led oversight and relationship continuity
FAQs
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How often should I update my 409A valuation?
Best practice is every 12 months or whenever there is a material event (e.g., funding round).
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How long does a 409A valuation take?
Usually 2–4 weeks depending on data availability and share class complexity.
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Is Valorega’s 409A approach IRS-compliant?
Yes — we follow safe harbor valuation frameworks recognized by the IRS.
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Will you coordinate with my auditors or board?
Absolutely — we support full documentation and board presentations.
