What is a 409A valuation and when do I need one?
When startups need a 409A valuation and how often to refresh it.
You generally need a 409A valuation before you grant stock options, because it sets the fair market value (FMV) used for the strike price. Granting below FMV can trigger serious tax penalties for recipients, so a current, independent 409A provides important protection.
When to get or refresh one:
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Before issuing your first options
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At least every 12 months
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After a material event such as priced financing or a major change in the business
You can request a 409A through PaperOS.
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