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409A Valuations

When you issue stock or stock options to yourself or your employees, if you do it at a value other than “fair market value” then you are likely creating compensation and income. And we all know… where’s there’s income, there’s tax.

In order to avoid unnecessary taxes, the IRS provides a “safe harbor” as long as you have a 3rd party determine the fair market value. That’s what a 409A valuation is, and why you need Early Growth to help you.

Stock options are the most common case for 409A valuation, but there are situations where it’s required. How do you know if you need one? If you answer “yes” to any of the following questions, it’s time to contact Early Growth for a 409A valuation:

  • Are you trying to value the common stock of a company?
  • Do you plan to issue stock options and set your strike price?
  • Have you raised a new round of funding since your last grant date?
  • Are you looking to sell IP from one company to another?
  • Has it been 12 months since your last 409A?

Quick Turnaround

AICPA Compliant

Audit Support

Common Stock Fair Market Value

Have more questions about 409A Valuations?
Read our article on Everything About… 409A Valuations

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