How long is a 409A valuation good for?

  • Finance

A 409A valuation is generally valid for up to 12 months, assuming no material changes occur that could impact company value. Material events include fundraising rounds, acquisitions, significant revenue changes, or major market shifts. If such an event occurs, the valuation must be updated immediately. Most companies refresh their 409A annually and after each financing round. Using an outdated valuation can invalidate safe harbor protection and expose the company and equity holders to significant tax penalties?

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.