Entries by datadrivendesign

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Does My Company Need a 409A Valuation?

Have you heard of IRC Section 409A and wondered if it applied to your company? Do you think you might be in need of a 409A valuation but are unsure? Most entrepreneurs have never heard of IRC Section 409A , if you haven’t then check out our article here (https://simple409.wpengine.com/why-do-i-need-to-get-a-section-409a-valuation/). The majority of earlier stage […]


My company is based outside of the United States, do I need to worry about IRS Section 409A?

Are you looking to hire a U.S. citizen? Are you thinking of opening an office in the U.S.? If you answered yes to either of these questions and are considering issuing deferred compensation (for example stock options or restricted stock units) then IRS Section 409A should be on your radar. What is a 409A valuation? […]

What certifications are required to be qualified to issue a 409a valuation?

Are there mandatory certifications? Can anyone issue a 409a valuation? There are no mandatory certifications to perform a 409A valuation, but the IRS does require that an appraiser have significant knowledge, experience, education and training. When choosing a 409A provider there are a couple of things you should consider: the first is whether the individual […]

Valuation Methods – The Asset Approach

The asset approach is one of the three approaches (along with the market approach and income approach) used to estimate enterprise and equity value, and is used in IRC 409A valuations.  The asset approach is defined in the International Glossary of Business Valuation Terms as “a general way of determining a value indication of a […]

How Long Does a 409A Valuation Take?

The time to complete a 409A valuation can range significantly: from a few days to a few months – mostly depending on the needs and the situation of the client. To get an idea of how the completion time of a 409A appraisal can vary so dramatically, it is important to understand the whole process, […]

Valuation Methods – The Income Approach

The Income Approach is one of the three approaches (along with the Market Approach and Asset Approach) used to estimate enterprise and equity value. The income approach seeks to identify the future economic benefits to be generated by an entity and to compare them with a required rate of return. This numerator/denominator relationship can be […]

Do Employees Have to Worry About 409A Penalties?

Sadly, yes. We have covered in other articles the importance of companies meeting safe harbor requirements for 409A by getting a qualified third party 409A valuation, but this regulation is also of great concern to employees. The implications for non-compliance can be severe, including significant 409A penalties. The following is an example of the kind […]