Preview a complete, professional 409A report for a fictional Series A startup. No signup required. When you're ready, get yours in days, not weeks.
Get Your Own 409A ReportTechCo Inc. — IRC Section 409A Compliance
The headline: your company's fair market value per common share, the valuation date, and the key conclusion your board needs to set option strike prices.
A snapshot of your business—stage, industry, recent milestones, revenue metrics, and a full cap table breakdown showing all share classes and their terms.
Market context matters. This section covers macro conditions, industry trends, comparable public companies, and relevant M&A transactions.
The math behind the number. Most reports use 2–3 methods (Backsolve, OPM, PWERM) with full assumptions disclosed—volatility, time to liquidity, risk-free rate.
Private shares can't be easily sold. The Discount for Lack of Marketability quantifies this using put option models and restricted stock studies. Typically 15–35%.
The backup: cap table waterfalls showing payouts at different exit values, OPM breakpoint analysis, comparable company data tables, and methodology citations.
A 409A valuation report includes an executive summary with the concluded fair market value, a company overview, economic and industry analysis, detailed valuation methodology (typically Backsolve and/or OPM), a Discount for Lack of Marketability (DLOM) analysis, and supporting exhibits including cap table waterfalls and comparable company data. You can see all these sections in the sample report above.
A typical 409A report ranges from 20 to 40 pages. Pre-seed and seed-stage companies with simple cap tables tend toward shorter reports (15–20 pages), while later-stage companies with complex multi-class structures, multiple methodologies, and extensive comparable analysis may run 35–45 pages.
IRC Section 409A requires a new valuation at least every 12 months, or after any "material event" such as a new funding round, significant revenue milestone, pivot, or potential M&A discussion. Most startups issuing options regularly get updated valuations every 6–12 months. If you're issuing options within 90 days of a material event, you likely need a new valuation.
The most common methods are the Backsolve Method (working backward from a recent funding round), the Option Pricing Model or OPM (treating each share class as a call option), and the Probability-Weighted Expected Return Method or PWERM (modeling different exit scenarios). Post-Series A companies typically use Backsolve as primary with OPM as a cross-check. Pre-revenue companies may use the Current Value Method (CVM).
DLOM reflects the reduced value of private company shares compared to freely tradable public shares. Since private shares can't be easily sold on an open market, they're worth less than equivalent publicly traded shares. Common approaches to quantify DLOM include the Protective Put Method (Chaffe model), the Asian Put Method (Finnerty model), and empirical restricted stock studies. Typical DLOMs for venture-backed startups range from 15% to 35%.
The last round price is the price per share of preferred stock, which carries additional rights (liquidation preference, anti-dilution, board seats). Common stock lacks these protections, so it's worth less. Additionally, the DLOM reduces the value further because common shares have no liquid market. A typical common-to-preferred ratio for Series A companies is 15–25%.
Ready to get your own 409A report? Delivered in days, not weeks.
Get Your 409A Report →