Tag: 409A valuations

Understanding Private Company Stock Valuation for Startups

Founders need to understand the value of their equity as the business grows, raises capital, and prepares to issue stock options. 409A valuations help establish the fair market value of common stock in a private company, providing an important reference for setting option exercise prices. Private company valuation can be complex because startups may have limited operating history, evolving projections, and multiple securities. A structured…