Independent 409A
Valuation Services
IRS-Compliant, Audit-Defensible 409A Valuations for Startups & Private Companies — determining the Fair Market Value of common stock in accordance with IRS Section 409A and ASC 820 guidelines.
Platform Capabilities
Guided 5-Step Workflow
From cap table setup to audit-ready report — every step is structured and defensible.
Allocation & DLOM Logic
OPM
Option Pricing Method
Uses Black-Scholes to treat equity classes as call options.
CVM
Current Value Method
Allocates value as if liquidated today.
CSE
Common Stock Equivalent
Assumes all preferred converts to common.
DLOM
Lack of Marketability
Applies Chaffe, Finnerty, or Asian Put models.
Valuation Methodology
Four Proven Approaches
We apply the most appropriate methodology based on your company's stage, funding history, and capital structure.
Backsolve
Post-Funding (< 12 mos)
Implies total equity value based on the pricing of the most recent preferred financing round.
Frequently Asked Questions
How often should a 409A valuation be updated?
The IRS requires a new 409A valuation at least every 12 months, or after a material event such as a new funding round, significant revenue change, or major pivot. Maintaining current valuations ensures safe harbor protection for stock option grants.
What methodologies are used for 409A valuations?
Zimbs Valetex employs three primary approaches: the Income Approach (discounted cash flow analysis), the Market Approach (comparable company and transaction analysis), and the Asset-Based Approach. The methodology selection depends on your company's stage, available data, and industry.
What is safe harbor protection and why does it matter?
Safe harbor protection under IRC Section 409A shields companies and option holders from adverse tax consequences. A qualified independent appraisal provides a presumption of reasonableness that the IRS must overcome to challenge your valuation.
Can your 409A reports withstand a Big 4 audit?
Yes. Our reports are prepared to institutional standards with full documentation of assumptions, methodology selection rationale, and discount analysis. They are regularly reviewed and accepted by Big 4 and national accounting firms.
What triggers the need for a new 409A valuation?
Key triggering events include equity financing rounds, debt conversions, significant changes in financial performance, acquisition offers, changes in capital structure, and approaching the 12-month expiration of the prior valuation.
Ready to Start Your 409A Valuation?
Schedule a free consultation with our valuation specialists to discuss your requirements and get a custom quote.