Top 409A Valuation Providers (2026)

Key takeaways

• A 409A valuation is an appraisal of a private company's common stock, done so that stock options can be priced at fair market value under Internal Revenue Code Section 409A.
• Getting 409A valuation wrong shifts a 20% additional federal tax, plus interest, onto the employee who holds the option, not onto the company.
• The right valuation method shifts with company stage, from a simple Option Pricing Model at seed to PWERM or a hybrid model closer to an exit.
• Providers fall into two broad groups, cap table platforms that bundle a 409A into their software and standalone valuation firms, and pricing can differ sharply between them.
• A company with no US taxpayers among its option holders generally falls outside Section 409A and should look to its own jurisdiction's valuation rules instead.
• The right provider depends on stage, turnaround needs, jurisdiction, pricing clarity, and whether a company wants its valuation tied to its cap table platform or handled independently.

What is a 409A valuation and why is it important

A 409A valuation is an independent appraisal of a private company's common stock, prepared so that stock options can be granted at fair market value under Internal Revenue Code Section 409A.

Section 409A governs how nonqualified deferred compensation is taxed. If a stock option is priced below fair market value on its grant date, it can count as deferred compensation under that framework, and that's what triggers the penalty: the employee, not the company, owes an additional 20% federal income tax on the amount involved, on top of ordinary income tax and a separate interest-based tax calculated from the year the amount was deferred or, if later, the year the option vested.

When a 409A valuation is required

A company needs a 409A valuation in each of the following situations:

• Before issuing its first stock options, since there is no fair market value to price them against otherwise
• Every 12 months, since the safe harbor presumption expires on that schedule
• After a new funding round, since a priced round resets what the stock is worth
• After a material event such as an acquisition offer, a major leadership change, or a significant shift in the business

Why does the 409A provider matter

Treasury regulations give companies a way to avoid that 20% tax penalty before it ever comes up for audit, through a protection called a safe harbor: a valuation that qualifies is presumed reasonable, and the IRS can only challenge it by showing the method or its application was grossly unreasonable. That shifts the burden of proof onto the IRS instead of the company.

A valuation that follows one of three safe harbor methods is presumed reasonable, and the IRS can only overturn that presumption by showing the method or its application was grossly unreasonable.

The method venture-backed company relies on is the independent appraisal: a valuation performed by a qualified, independent appraiser, dated no more than 12 months before the stock option grant it supports.

How company stage changes the methodology

• Pre-seed and seed. A simple cap table (common stock, an option pool, maybe a SAFE or two) and limited operating history usually call for the Option Pricing Model, mainly to set a defensible baseline for the first option grants.
• Series A and Series B. New preferred share classes with their own rights usually push the valuation toward an OPM backsolve, which reverse-engineers the common stock value from the price of the most recent preferred round.
• Series C and beyond. Companies closer to an exit often need PWERM or a hybrid model that weighs multiple outcomes (IPO, acquisition, staying private) instead of one scenario, with documentation standards rising to match the scrutiny these valuations get.

How to evaluate a 409A valuation provider?

Specific providers change faster than the requirements behind them, so it helps to fix the criteria first.

1. Independence and credentials. Confirm whether the appraiser meets the regulation's independence standard and whether the final report names and is signed by that person, rather than arriving as an unsigned, system-generated output.
2. Methodology matched to stage. An early-stage company is typically valued off a backsolve from its most recent financing round, while a later-stage company typically blends that with income or market approaches. A provider should say plainly which method applies to a given report and why.
3. Turnaround against the grant calendar. A valuation that takes several weeks to arrive can leave new hires waiting on their first option grant, since granting without a current 409A behind the strike price carries real compliance risk, so most companies hold off rather than risk it.
4. What happens at a material event. A funding round, acquisition offer, or major strategic shift can make a valuation stale before its 12 months are up, and a provider's policy on refreshing it matters as much as the first report.
5. Audit support. Ask who stands behind the report if an auditor raises a question months or years later: a named analyst, or just a support ticket.
6. Jurisdiction. A 409A valuation is built for US tax law specifically; a company with no US taxpayers among its option holders may need a different kind of valuation altogether.
7. Realistic accuracy, not the lowest number. A valuation that comes in suspiciously low can look like an attempt to dodge tax on paper, and both the IRS and investors reviewing diligence before a raise or exit will notice. A defensible number sits close to actual value, not at the floor.
8. Auditor coordination. Ask whether the provider will align with your auditor on methodology before finalizing the report, since disagreement afterward usually means paying for a follow-up valuation.
9. Revision cost. If an auditor pushes back on an assumption, know upfront whether that's a free revision or a new billable engagement.

Top 409A valuation providers

Most 409A providers fall into one of two models: a cap table platform that bundles the valuation into its own software, or an independent valuation firm that works on 409A reports as its core business with no software attached.

EquityList

EquityList delivers 409A valuations through two valuation partners. Every report is signed by the certified valuation specialist who performed the analysis, and if the cap table also runs on EquityList, the platform tracks the 12-month expiry and material-event triggers automatically instead of on a separate calendar.

What makes it stand out:

• Turnaround: first draft in 7 to 10 business days
• Signed, accountable reports: every report carries the name of the certified valuation specialist who did the analysis, not a support queue
• Coverage: US, India, and UK, for companies with option holders or subsidiaries split across those jurisdictions
• Works standalone or integrated: get just the valuation, or run it on the same platform as your cap table so expiry and material-event triggers are tracked automatically
• Migrating from Pulley: your first 409A valuation is on EquityList

Carta

Carta is the most widely used cap table platform that also offers 409A valuations, typically as a paid add-on or bundled into higher subscription tiers. A standalone 409A commonly runs $1,500 to $5,000 or more depending on company complexity, and the subscription tiers that bundle it run into the thousands of dollars a year on their own, well above what most boutique valuation firms charge for the report alone.

Scalar

Scalar is an independent valuation firm founded in 2009 and headquartered in Draper, Utah. It works across 409A, portfolio valuation, and purchase price allocation rather than specializing in 409A alone, and reported completing its 25,000th valuation assignment in 2024.

Kruze Consulting

Kruze is primarily a startup accounting and outsourced CFO firm that also offers 409A valuations, typically delivered within 10 business days according to its own site. It suits a company already using Kruze for bookkeeping, tax, or CFO support.

Redwood Valuation Partners

Redwood is an independent valuation firm staffed by Accredited Senior Appraisers, Chartered Financial Analysts, and CPAs. A draft is typically ready in 3 to 4 weeks, with expedited options down to about a week, and stays valid for 12 months or until a material event such as a new funding round.

Get EquityList's 409A valuation services

EquityList provides 409A valuations for companies at any stage, in the US, India, or UK. The valuation works on its own, so there's no need to move your cap table over just to get one, but if your cap table does run on EquityList, the same system tracks when the next valuation is due, automatically. And because every report carries the name of the certified specialist who signed off on it, there's always someone accountable to point to if an auditor or investor asks a question later. 

To get started, reach out to the EquityList team.

FAQs on 409A valuation providers

How long does a 409A valuation stay valid?

Under the independent appraisal safe harbor, a valuation is presumed reasonable for up to 12 months from its effective date, provided no material event occurs in the meantime that could affect the company's value. A material event shortens that window regardless of how recently the valuation was completed.

Can a company perform its own 409A valuation?

A company can value its own stock internally, but doing so forfeits the independent appraisal safe harbor and its presumption of reasonableness, leaving the company to demonstrate the valuation's reasonableness on its own if the IRS ever challenges it. Most venture-backed companies use an independent, qualified appraiser specifically to avoid that position.

What is the 409A valuation safe harbor?

It is a set of three valuation methods under Treasury regulations, most commonly the independent appraisal method, that earns a company's stock valuation a rebuttable presumption of reasonableness. The IRS can only overturn that presumption by showing the method or its application was grossly unreasonable, which shifts the burden of proof onto the IRS rather than the company.

Does a company need a 409A valuation if it has no US employees?

Not necessarily. Section 409A applies to deferred compensation involving US taxpayers, so a company with no US-based option holders and no US entity granting the compensation generally does not need a 409A valuation, though it would still need to follow its own jurisdiction's valuation rules before granting equity.