You cannot legally grant stock options without first establishing the fair market value of your common stock through a 409A valuation.

409A valuations in 2026 range from $499 to $15,000+.

Five steps, in order: (1) Adopt an equity incentive plan.

The penalties for granting options without a 409A fall on your employees, not on you.

A 409A valuation is an independent appraisal of your company's common stock price.

Traditional valuation firms take 3–6 weeks.

Safe harbor is the legal presumption that your 409A valuation is correct.

Five mistakes, in order of how often we see them: (1) Granting options before getting a 409A.

Your fundraising valuation prices preferred stock.

The backsolve is the most common 409A methodology for venture-backed startups.

Closing a priced round is the clearest material event under IRC §409A.

Closing a funding round triggers a cascade of compliance tasks, and the 409A is the linchpin — until it's done, you can't grant any new options, which blocks hiring.

A meaningful SAFE raise almost always qualifies as a material event that triggers the need for a new 409A.

The #1 cause of 409A delays isn't the appraiser — it's the founder not having documents ready.

You found your key hire.

Under Treasury Regulations, your 409A valuation expires exactly 12 months from the valuation date.

If your 409A expires and you keep granting options, those grants lose safe harbor protection — but they're not automatically invalid.

A single-engagement 409A costs $2,500 (early-stage).

When a client asks "who should I use for my 409A?", your recommendation carries weight — and risk.

When your startup client asks "who should I use for my 409A?", your recommendation needs to satisfy both tax compliance (IRC §409A) and financial reporting (ASC 718).