IRS-Compliant Affordable 409A Valuation Services Cost $500 – A Complete Guide

Considering providing stock options? Verify that your valuation is accurate and complies with IRS regulations. For as little as $500, Transaction Capital LLC (TXN Capital LLC) provides precise, audit-ready 409A valuations that are suited for private businesses and startups. This is your comprehensive reference on valuation techniques, compliance, price, and selecting the best valuation partner.

What Is a 409A Valuation?

The Fair Market Value (FMV) of your private company’s common stock is established by a 409A valuation. When determining striking prices, it is essential for:

• Incentive Stock Options (ISOs)
• Non-Qualified Stock Options (NQSOs)
• Restricted Stock Units (RSUs)

Without a proper 409A, you risk:

• Employee income taxes are due immediately.
• IRS penalty of 20%
• Interest accrued on delinquent taxes.

A third-party, IRS-compliant valuation will keep you safe.

IRS Safe Harbour Compliance: What Is It?

You can avoid IRS fines with a Safe Harbour 409A if:

• Completed by an independent, certified appraiser
• The IRS Revenue Ruling 59-60 is followed.
• It is updated every year or if significant changes occur.

Here at TXN Capital LLC, we adhere to:

• Consistent Professional Appraisal Practice Standards (USPAP)
• SSVS No. 1 (AICPA Standards for Valuation)
• International Valuation Standards, or IVS,
• No quick corners, complete protection, and complete compliance.

Who Performs Your 409A Valuation?

Your valuation is only handled by qualified experts:

• Accredited Senior Appraiser, or ASA®
• Accredited in Business Valuation, or ABV®
• Certified Valuation Analyst, or CVA®

All reports contain:

• Methods presented in detail
• Standardised format that is ready for an audit
• Certifications of appraisal that have been signed
• Trusted by investors, auditors, and the IRS.

What’s Inside a TXN Capital 409A Report?

Our thorough reports can be used as presentations for:

• Boards 
• Those who invest
• The Auditors
• The tax authorities

Comprises:

• Transmittal Letter
• Date of Valuation and Premise
• Industry and Financial Analysis
• Analysis of SWOT
• Methods in Detail (used and excluded)
• Premiums & Discounts (where applicable)
• Certified by signature

No templates. Only expert, customised reports.

409A Valuation Pricing

Simple, transparent tiers:

Pricing depends on:

• Distribute the class structure.
• Quantities and kinds of securities
• History of Funding
• Immediacy

What Determines the Price of Your 409A?

Among the factors are:

• Company Stage: Series C/D+ Early vs. Late Stage
• Cap Table Complexity: Several SAFEs, notes, or share classes
• Revenue Size: Predicting ARR or contract requirements
• Industry Type: Fintech, Climate Tech, Biotech, and SaaS = Unique benchmarks
• Turnaround Time: Quicker delivery equals higher prices.

Methods of Valuation We Employ

We customise approaches based on your data and stage:

• Backsolve Method (OPM): For businesses supported by venture capital, the Backsolve Method (OPM)
• Discounted Cash Flow (DCF): For companies that make money
• Market Comparables:  Comparables in the market to public or M&A standards
• Cost-to-Recreate: For startups or businesses with a lot of IP

All techniques are supported by evidence and adhere to USPAP.

When to Update Your 409A Valuation?

Make changes to your 409A if: 

• It’s been a year.
• More money was raised.
• significant business event (product launch, M&A, significant revenue shift)
• IRS risk is a result of outdated valuations. Keep yourself safe.

What You’ll Need to Start

To begin your 409A, just supply:

• Financials for two to three years (monthly if early-stage)
• Forecasts or growth projections for three to five years
• Cap table (export from Excel or Carta)
• Overview or pitch deck
• Details of the funding round (SAFEs, notes, and priced rounds)
• Easy onboarding. Quick turnaround.

IRS Compliance Checklist: Pick the Correct Colleague

IRS Compliance Checklist: Choose the Right Partner

• IRS Safe Harbour Compliance 
• Certified Analysts (ABV, ASA, CVA) 
• Complete Audit Defence
• TXN Capital LLC satisfies every requirement, no matter what.

Knowledge of the industry and preparedness for audits

Our areas of expertise include:

• Startups are using stock options-backed companies with intricate cap tables (notes, preferred equity, and SAFEs)
• All TXN Capital 409As come with:
• Modelling safe and convertible notes
• Study of strike prices
• Payouts using waterfall modelling

Ready for an audit. Investor-ready. Future-proof.

Get a 409A Valuation You Can Trust

Protect your business and your team’s future.

• Phone ‎+1 (917) 809-4838
• Email: info@txncapitalllc.com
• Website: txncapitalllc.com
• Telegram: saurobhbarick