Hi, I’m Chris Walton, author of this guide and CEO of Eton Venture Services.
I’ve spent much of my career working as a corporate transactional lawyer at Gunderson Dettmer, becoming an expert in tax law & venture financing. Since starting Eton, I’ve completed thousands of business valuations for companies of all sizes.
Read my full bio here.
A 409A valuation is good for 12 months, provided no significant changes or material events affect the company’s value.
However, several factors can impact this duration:
Material Events: Events such as a new funding round, a significant change in revenue or profitability, mergers, acquisitions, or any other event that could materially impact the company’s financial outlook, may necessitate a new valuation. To understand when a 409A is required read our full guide here.
Annual Update: If no material events occur, you must complete a 409A valuation every 12 months to comply with IRC 409A. You should consult an annual valuation advisor for this.
It’s important to stay up to date with their 409A valuations to ensure compliance with IRS regulations and to avoid potential tax penalties for their employees.
A material event refers to any event or occurrence that can significantly impact a company’s financial position, operations, or stock value.
These events are important because they may necessitate a re-evaluation of the company’s stock value, impacting things like the pricing of stock options.
Examples included funding rounds, mergers, and major financial contracts.
Related read: How much does a 409A valuation cost?
Unsure whether you need a new valuation? Reach out to our team here for a free consultation.
Related Read: Check out this Real 409A Valuation Report Sample
Schedule a free consultation meeting to discuss your valuation needs.
Chris co-founded Eton Venture Services in 2010 to provide mission-critical valuations to venture-based companies. He works closely with each client’s leadership team, board of directors, internal / external counsel, and independent auditor to develop detailed financial models and create accurate, audit-proof valuations.
