Finance & Moneyadvanced
409A Valuation
Section 409A Valuation
Definition
An independent assessment of a private company common share value, used mainly in the US to set fair option strike prices.
Why it matters
A proper 409A valuation keeps your employee share options compliant and protects staff from unexpected tax problems.
Example
Before granting options, a company gets a 409A valuation that sets the strike price at 50p per share.
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