409A valuation provider you can trust and talk to

A 409A valuation should be performed by a qualified, independent third‑party valuation provider, not by the company’s founders, employees, or investors. An independent appraiser helps you meet IRS “safe harbor” standards, which is critical for pricing stock options at fair market value and avoiding challenges during audits or due diligence.​

At Qapita, 409A valuations are prepared and reviewed by experienced valuation specialists using recognized methods such as OPM backsolve and other ASC 820‑aligned models. Each report is documented with clear assumptions, cap‑table details, and financial analysis so it is IRS‑compliant, audit‑ready, and defensible in front of your board, investors, and auditors.

Startups need a 409A valuation to establish the fair market value (FMV) of their common stock before granting stock options or other equity awards to employees and advisors. This helps ensure options are not treated as discounted compensation, which can otherwise create adverse tax consequences and penalties for recipients under U.S. tax rules.

A formal 409A valuation also supports regulatory compliance and “safe harbor” protection by showing that FMV was determined by an independent, qualified appraiser using accepted valuation methodologies, which becomes essential during audits, funding rounds, and exits when equity pricing is scrutinized. In practice, many founders rely on specialized providers for this work - Qapita, for example, delivers 409A valuation services for startups at every stage, from seed through late‑stage and pre‑IPO.​

A startup should obtain a 409A valuation before issuing stock options for the first time to any employees, advisors, or contractors who are subject to U.S. tax. After that, it’s required to refresh that valuation at least every 12 months. A new valuation is also needed sooner whenever a “material event” occurs - such as a funding round, major change in financial performance, secondary transaction, or acquisition offer, so option pricing stays compliant with IRS rules and aligned with current fair market value.

A 409A valuation should be updated at least once every 12 months to maintain IRS “safe harbor” protection and keep your option pricing aligned with current fair market value. In practice, you should also get a fresh 409A sooner whenever a material event occurs - such as closing a new funding round, receiving an acquisition offer, executing a major secondary sale, or experiencing a significant change in your financial performance or business model - because these events can meaningfully change what your company is worth and make an older valuation hard to defend.​

Skipping 409A valuations can create real problems for both your team and the company. If the IRS later decides your stock options were granted below fair market value, employees may owe income tax on the “discount” right away, plus an additional 20% penalty and interest on top of their normal tax bill.​

On top of that, not having a proper 409A on file can raise red flags in audits, funding rounds, secondary transactions, or an eventual exit, because investors, acquirers, and auditors all expect to see a consistent history of independent, compliant valuations underpinning your option grants.

Most 409A valuations in the market take 1–2 weeks once all necessary documents are provided, but Qapita is built to move faster without cutting corners. With a clear information checklist, dedicated analyst, and streamlined workflows, many startups see a signed, audit‑ready 409A report from Qapita in about 7–10 business days, with expedited turnaround available when a board meeting, grant date, or funding round is coming up fast.​

Qapita's 409A valuations are expert‑led, not algorithm‑only, which means a real valuation specialist reviews your cap table, financials, and funding history to tailor the model and assumptions to your stage and structure. Beyond the report itself, Qapita offers seamless integration with cap table management software and equity workflows, so your 409A data flows directly into option grants, ASC 718 reporting, and stakeholder dashboards without manual re‑entry. You also get direct access to your analyst for auditor questions, board walk‑throughs, or just explaining the numbers to your team - support that many standalone 409A providers don't offer once the PDF is delivered.​