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, and the time required for each step.

Step 1 – Determine the needs of the company

Before starting a valuation, we establish whether a 409A valuation is right for the company in question. We also need to determine the most appropriate valuation date. In some cases, we will recommend a company wait several months before getting their 409A valuation so they get better value for their money (a 409A valuation has an expiration date).

If the company knows they need a 409A valuation and we can quickly determine the valuation date they need for their report, this first step may only take a few minutes on the phone. In other cases, this step involves engaging several people at the company including the board, investors, management, legal counsel and others. In that case it may take weeks to determine whether moving ahead with an appraisal and choosing a valuation date is appropriate.

Step 2 – Sign the engagement letter and collect payment

We use a digital signing system that makes signing the engagement letter fast and easy. We accept instant payment via wire and PayPal. We find it usually takes between a day and a week for us to receive these from the client.

Step 3 – Upload company documents

Using our secure web form, clients can quickly and easily fill in information about their companies and upload the necessary documents. However, in some cases this may take some time. A company might have to draft its 5 year financial projections. Also, in cases where the valuation date recently passed, companies will take some time to produce year to date financial statements. We have had clients complete this step within an hour and others have taken several weeks.

Step 4 – Complete draft 409A valuation report

We commit to complete the draft valuation report within three weeks. There are times when we may have to ask for additional information or documents. Provided those requests are responded to quickly, we usually complete the draft report within two weeks.
In cases where the company requires a faster turnaround, we do our best to satisfy those requests and have turned around valuations in as short as 3 business days. While this is not the norm, it is possible.

Step 5 – Draft review

Before receiving the final certified valuation report, we provide our clients with the opportunity to review the draft report. Next, we meet to discuss the assumptions and inputs to the valuation to ensure we have described the company accurately. If revision is required, it may add a few days to the total engagement time although most of our clients have been satisfied with their valuation the first time around.

Step 6 – Final certified 409a valuation report

Once the draft valuation is agreed to with management, we request a representation letter from the company which we provide. After this letter is signed and received, we deliver the final valuation report through a secure download link.

How much time is required for a 409A valuation?

In summary, the time required for a 409A depends on the unique situation of the company being valued. We have had valuations that only took 5 business days from the time the client first contacted us until when the final certified report was delivered. On the other end of the spectrum, the process has taken several months for other clients.
For planning purposes, we suggest companies start the process one to two months before they need the valuation to allow themselves adequate time to prepare the documents and properly review the draft report. However, if you need your 409A valuation in a hurry, contact us and we will do everything we can to provide it to you quickly.

Are you ready to start your valuation now?
Get Your Professional Valuation Started Now

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *