409A valuation estimator
A 409A sets the fair-market value of your common stock, which drives option strike prices. A formal 409A comes from a provider and costs money, but you can ballpark it. This tool applies a common-stock discount to your last preferred-round price per share to estimate a range. Treat it as a directional estimate for planning option grants, not as a defensible 409A. When you grant real options, get a proper 409A from a qualified provider.
This is a rough ballpark, not a defensible 409A. To grant options with safe-harbor protection, get an independent 409A from a qualified provider.
How it works
- 1Enter your last round's post-money valuation and fully diluted shares.
- 2Pick a discount range for common stock versus preferred.
- 3See an estimated 409A value per share and the implied common-stock valuation.
Related
Frequently asked questions
What is a 409A valuation?+
A 409A is an independent appraisal of a private company's common-stock fair-market value, named after the US tax-code section. It sets the strike price for employee stock options so grants are issued at or above fair value.
Can I do my own 409A?+
You can estimate one, which is what this tool does, but for actually granting options you need an independent 409A from a qualified provider to get the safe-harbor protection. A self-made number does not carry that protection.
Why is common stock worth less than preferred?+
Preferred shares carry liquidation preferences and other rights that common shares lack, so common stock is appraised at a discount, often a meaningful one for early-stage companies. That discount is what makes option strike prices low.
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