Side by side
| Cap table software 409A | Independent valuation advisor | |
|---|---|---|
| Process | Standardized workflow, largely driven by the data already on the platform | Scoped to the company, with direct discussion of its facts |
| Method | Usually a standard approach applied across many companies | Methods chosen and combined to suit the stage and sector |
| Complex structures | May be handled with simplifying assumptions | Modelled explicitly, class by class |
| Point of contact | Often a support queue or rotating analyst | A named, credentialed professional |
| Audit and diligence | Support varies by provider and plan | The preparer explains and defends the report |
| Other jurisdictions | Generally US 409A only | Can coordinate with a UK EMI valuation |
| Cost | Often included in a subscription | A separate fee, agreed per engagement |
When software is enough
- One class of shares, or a single straightforward preferred round.
- A recent priced round that gives a clear reference point.
- No audit yet, and no transaction on the horizon.
- All option holders are in the US.
When to use an independent advisor
- Layered capital structure. Several preferred classes with different preferences, participation, or conversion terms.
- Pre-revenue life science or deep tech. Value that depends on a pipeline or a technical milestone and cannot be read from a revenue multiple. See 409A for pre-revenue biotech.
- A long gap since the last round, or a round on unusual terms.
- Audit, IPO, or sale preparation. Auditors and acquirers review past 409A reports closely.
- Employees outside the US. A UK company, or a US company with UK staff, may also need an EMI valuation consistent with the 409A.
Questions to ask any provider
- Who prepares and signs the report, and what are their credentials?
- Which methods will be used, and why are they right for a company like ours?
- How will our specific share class terms be modelled?
- Will you speak to our auditors, and is that included in the fee?
- What happens if the valuation is questioned later?
About cost
A bundled valuation looks cheaper, and for a simple company it is. The comparison changes once the valuation has to carry weight: the cost of a 409A that fails is borne by employees as penalty tax, and by the company in a delayed audit or a difficult diligence process. Our guide to 409A cost and timeline covers typical market ranges.
If your company has reached that point, see our 409A valuation service.
Frequently asked questions
Is a 409A from cap table software valid?
It can be. Safe harbor depends on the valuation being an independent appraisal by a qualified person using reasonable methods, not on the type of provider. What varies is how much judgment is applied to your company's specific facts.
When should a company move to an independent valuation firm?
Common triggers are a second or third preferred round, a pipeline that cannot be valued from multiples, a secondary sale, a first audit, preparation for an IPO or sale, or the need for a valuation in a second country.
Will switching provider change our valuation?
The conclusion should reflect the facts at the valuation date whoever prepares it. A new provider will review the prior report, and any change in method should be explained in the new one.
Can we keep our cap table software and use an independent valuer?
Yes. The two are separate. An independent valuer works from an export of your cap table, whichever platform it is held on.
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.