What is a 409A valuation and why do I care?

A 409A valuation is an independent appraisal of your company that enables you to hire and grant stock options to employees.

What happens if I don't get a 409A valuation?

Tax liabilities if the IRS determines that your options were undervalued. The lack of a 409A will raise a red flag to investors and their lawyers on funding rounds.

What should I look for in a 409A provider?

  1. Defensible - 409As should stand up to the most aggressive auditors and the IRS. Choose a provider with a long history of defensible 409As and a client base covering your industry.

  2. Independent - An independent appraiser shifts the burden of proof to the IRS to show your options are undervalued. Avoid risk by choosing an appraiser that you don't use for other services.

  3. Speed & Accuracy - A 409A can be a barrier to issuing options and hiring. Choose a provider that completes 409A valuations quickly and accurately.

Why get a 409A through Pulley?

We connect you with an independent appraiser that utilizes your cap table and related documents to value your company. We streamline the process and connect the 409A valuation to the rest of your cap table while you focus on building a great company.

What is the difference between a Pulley vs Carta 409A valuation?

A 409A valuation must be conducted by an independent third party who does not have any interest in the valuation of your shares. Secondary exchanges built into your cap table service or having your cap table provider perform your 409A valuation in-house complicates your valuation because it's no longer independent. Pulley partners with experienced third-party providers so you can receive a 409A valuation that is both defensible and independent.

Who does Pulley partner with for your 409A valuation?
Learn more about Aranca, Pulley's 409A valuation partner: http://help.pulley.com/en/articles/4781719-learn-about-our-409a-valuation-partner

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