How do I choose a valuation date for the 409A valuation?
Several factors should be considered when selecting a valuation date and the final selection should be discussed with the company's legal counsel. 409A valuations are valid for a maximum of twelve months after the effective date, or until a material event.
If you have recently closed a round of financing, your valuation date should be the closing date of the round. If the round had multiple closings, choose the last closing date.
If you have not raised capital recently, we recommend choosing a valuation date that is both at the end of an accounting period and captures any recent material events.
Occasionally, companies will request a historical 409A valuation to cover hand shake option grants that should have been issued to early employees. Please consult your law firm before requesting this type of valuation, and before using it to approve option grants covering historical periods.
Can I select a date in the past?
Yes, you can select a valuation date in the past. If requesting a historic valuation, provide information that would have been available at the time of the selected valuation date.
Can I request a valuation date in the future?
The earliest available valuation date you can select is the date that you submit the 409A request. The 409A report utilizes public market data including volatility, risk free rates, and comparable company data as of the valuation date.
How many historical 409A valuations can our company request?
Carta will prepare up to four historical 409A valuations at no additional charge. More than four historical valuations may be accommodated on a case-by-case basis for an additional fee. When completing the Request Form for a historical 409A, provide all information that was known or knowable as of the requested historical valuation date — including historical and forecasted financials as of that date.