When you need one
- Before your first option grant to any US taxpayer, whether an employee, advisor, or contractor.
- At least every 12 months for as long as you keep granting.
- After a material event: a priced financing round or signed term sheet, an acquisition offer, a secondary sale, or a major shift in the business such as a clinical data readout or a significant licensing deal.
- When a non-US company starts granting to US taxpayers. See our guide to 409A valuations for UK companies.
What we deliver
- A concluded fair market value per share of common stock as of a specific valuation date.
- An enterprise value analysis using the market, income, and asset approaches as appropriate to your stage.
- An allocation of that value across your capital structure using the option pricing method (OPM), the probability-weighted expected return method (PWERM), or a hybrid of the two.
- A supported discount for lack of marketability.
- A signed, board-ready report that also supports stock compensation expense under ASC 718.
- Support afterward if your auditors or the IRS have questions.
Why sector focus matters
Technology and life science companies rarely fit a template. Revenue multiples say little about a company whose value sits in a clinical pipeline, and a simple cap table model breaks down once there are several preferred classes with different liquidation preferences, participation rights, and conversion terms.
We work exclusively with these companies. For a pre-revenue biotech, that means anchoring enterprise value to your most recent financing, to risk-adjusted cash flows from the pipeline, or both, and then allocating it across the share classes in a way that reflects how value would actually flow in an exit. Our guide to 409A valuations for pre-revenue biotech explains the approach in detail.
How an engagement runs
- Intake. A short, guided checklist: cap table, financials, transaction history, option plan documents, and pipeline or product milestones.
- Analysis. We estimate enterprise value and allocate it across the capital structure.
- Draft and review. You see a draft conclusion and methodology summary within 10 business days of a complete intake, before anything is finalized.
- Delivery and support. A signed, audit-ready report, plus follow-up support.
Granting in the UK as well?
If you also grant EMI options to UK employees, the two valuations should rest on the same view of the business. Our cross-border service produces both from one engagement, and our guide to EMI vs 409A valuations explains how the two differ.
Frequently asked questions
How long is a 409A valuation valid?
Up to 12 months from the valuation date, provided nothing material happens in the meantime. A new financing round, a signed term sheet, an acquisition offer, or a major clinical or commercial milestone can all make an existing valuation stale, and a fresh one should be completed before the next grant.
What is the 409A safe harbor?
If the fair market value used to set an option's exercise price comes from an independent appraisal performed no more than 12 months before the grant, the IRS presumes the valuation is reasonable. The IRS can only overturn it by showing the valuation was grossly unreasonable, which moves the burden of proof away from the company.
Do non-US companies need a 409A valuation?
Yes, whenever they grant options to someone subject to US tax, including US-based employees and US citizens working abroad. The rule follows the taxpayer, not the company's place of incorporation.
What do you need from us to start?
A current cap table, your articles or charter, recent financial statements and projections, details of your latest financing, and your option plan. For life science companies we also ask for a pipeline summary and expected milestone timing.
How much does a 409A valuation cost?
It depends on the complexity of your capital structure and stage. We agree the scope and fee with you before any work begins.
This page is general information, not tax or legal advice. It reflects US and UK rules as we understand them in October 2026; confirm how they apply to your company with your advisers.