USPAP-compliant appraisals by best-in-class appraisers
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Joe Kattan
Justin Ramirez, ASA, ABV, CFA
Raymond Ghelardi, ASA
Aron Blue
About AppraiseItNow's 409A Appraisal Services
AppraiseItNow provides independent, USPAP-compliant 409A valuations for private companies that need to establish the fair market value of their common stock before issuing equity compensation. These appraisals are required under Section 409A of the Internal Revenue Code and are used to set defensible strike prices for stock options, restricted stock units, and other equity awards. Companies that fail to obtain a qualified 409A valuation risk significant tax penalties for both the company and its employees, making the quality and defensibility of the report critical. As a specialized component of our broader business valuation services, our 409A engagements are conducted by credentialed professionals with deep experience in startup and growth-stage company valuation. Our mission is to deliver defensible, USPAP-compliant valuations with exceptional speed, professionalism, and client service.
Our appraisers serve founders, CFOs, general counsel, and equity plan administrators at privately held companies ranging from early-stage startups to pre-IPO businesses. Because 409A valuations are based on financial statements, cap table data, and comparable market information, these engagements are conducted entirely remotely, with no onsite inspection required. We offer Fair Market Value (FMV) appraisals for various intended uses.
What Types of 409A Do We Appraise?
409A valuations are specifically focused on the common stock of private companies, but the complexity and methodology vary significantly depending on the company's stage, capital structure, and recent financing activity. Key scenarios we handle include:
- Early-stage startups with no institutional funding and limited financial history
- Seed and Series A companies following a priced equity round
- Companies with complex capital structures including preferred stock, SAFEs, and convertible notes
- Growth-stage companies with multiple classes of equity requiring option pricing model analysis
- Pre-IPO companies requiring a final 409A before a public offering or direct listing
- Companies preparing for a merger or acquisition where equity awards must be valued
- Businesses that have experienced a material event triggering a required revaluation, such as a new financing round or significant revenue milestone
- Companies needing a 409A refresh within the 12-month safe harbor window
Who Does AppraiseItNow Serve?
AppraiseItNow serves startup founders, CFOs, and equity plan administrators who need a qualified 409A appraisal to stay compliant with IRS requirements, as well as attorneys, CPAs, and venture capital advisors who coordinate valuations on behalf of their portfolio companies or clients.
5-Star Valuation Services, Loved by Hundreds
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Business valuations for commercial and personal clients
Servicing Commercial & Industrial Businesses
AppraiseItNow serves major businesses and commercial clients, including:
- Banks and lenders
- Operating companies and business owners
- Internal finance teams
- CPAs
- Estate Planners
- Registered Investment Advisors (RIAs)
- Tax Attorneys
Servicing Individuals & Households
AppraiseItNow also serves individual consumers with projects large and small. These clients often include:
- High Net Worth Individuals (HNWIs) with privately-held investments
- Individuals making IRA coversions or charitable donations
- Couples going through marital divorce
- Families dealing with estate planning or post-death estate matters
- Individuals going through major financial or other life events
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How our Valuation Process Works
Written USPAP-compliant business valuations for when defensibility matters.
Given the USPAP-compliant nature of AppraiseItNow’s appraisal reports, we prepare our deliverables for major legal, tax, and financial reporting purposes for individual and commercial clients.
Popular uses of our appraisal reports include:
Tax, Estate & Financial Planning
- Estate Tax - IRS Form 706
- Capital Gains Tax reporting
- Gift Tax (Transfer Tax) - IRS Form 709
- Charitable donations - IRS Form 8283
- Traditional to Roth IRA conversions
- Estate planning and probate
- Bankruptcy Filing
Transactions, Lending & Investment
- Loan collateral
- Purchase price allocation & cost segregation
- Mergers and acquisitions
- Financial Reporting
- Investment analysis
- Equitable distribution for divorce or partnership dissolution
What types of 409A valuations does AppraiseItNow appraise?
AppraiseItNow performs 409A valuations for a wide range of private companies and equity structures. Common engagements include:
- Common stock valuations for option grants in startups and growth-stage companies
- Equity compensation plans involving stock options, restricted stock units, stock appreciation rights, and phantom stock
- S-Corps, C-Corps, and LLCs issuing nonqualified deferred compensation
- Multi-entity organizations and companies with complex cap table structures
Are your 409A appraisals USPAP-compliant?
409A valuations fall under business appraisal standards rather than personal or real property standards, so USPAP Standards 7 and 8 do not directly govern them. Instead, our appraisers follow AICPA, ASA, and NACVA standards for business valuations, which are the recognized frameworks for this work. Our reports are prepared to meet IRS requirements for a qualified independent appraisal and are designed to withstand scrutiny from auditors, the IRS, and courts.
What are common reasons someone needs a 409A appraisal?
Companies need a 409A appraisal any time they issue equity compensation to employees or contractors, since Section 409A of the Internal Revenue Code requires that stock options be granted at fair market value. Common triggers include:
- Issuing new stock options or RSUs for the first time
- Annual updates to keep the valuation current within the required 12-month window
- Closing a new funding round or completing an acquisition that constitutes a material change in value
- Adding phantom stock or stock appreciation rights to an executive compensation plan
- Preparing for an IPO, merger, or secondary transaction
Can you appraise 409A interests in companies with limited documentation or early-stage financials?
Yes. Early-stage and pre-revenue companies are among the most common 409A clients, and appraisers are experienced working with limited historical data. For pre-revenue firms, the asset-based approach is often weighted more heavily, and the IRS recognizes an illiquid startup presumption that can discount common stock value significantly below preferred stock. We will work with whatever financial data, projections, and cap table information is available and document all assumptions thoroughly in the report.
Can you appraise large portfolios or multiple equity grants across a company?
Yes. AppraiseItNow can handle engagements involving multiple grant dates, complex cap tables with several share classes, or organizations with multiple related entities. Each assignment is scoped to the specific ownership interests and grant dates involved, and we coordinate directly with founders, CFOs, and legal counsel to gather the necessary data efficiently.
Do you provide online or remote 409A appraisals?
Most 409A appraisals are completed entirely remotely, since the process relies on financial documents, cap table data, and management interviews rather than physical inspection. For larger or more complex engagements, we can coordinate an in-person appraiser anywhere in the United States. Our nationwide service means geography is never a barrier to getting a compliant, defensible valuation.
How much does a 409A appraisal cost?
Fees are based on the scope of the engagement, including company stage, complexity of the capital structure, and the number of share classes involved. All fees are quoted as a fixed price before work begins, so there are no surprises. Contact us for a quote tailored to your company's situation.
How long does a 409A appraisal take?
Most 409A engagements are completed within 2 to 4 weeks from the time we receive all required information. Rush service is available for situations where options need to be granted quickly, with a 7 to 10 day turnaround upon request. Timelines can vary based on the complexity of the capital structure and how quickly financial data is provided.
Who prepares the appraisal report?
409A reports at AppraiseItNow are prepared by credentialed business valuation professionals with significant experience in equity compensation, financial modeling, and private company analysis. Our team includes appraisers holding ASA, ABV, and CFA designations, and all reports are reviewed for quality and defensibility before delivery. Every appraiser is independent of the company being valued, as required by IRS safe harbor rules.
Do you prepare appraisals for IRS Form 8283 (Noncash Charitable Contributions)?
If a company donates privately held shares or other equity interests, a qualified appraisal is required for noncash deductions exceeding $5,000, reported on Form 8283. AppraiseItNow can prepare valuations that meet the IRS qualified appraisal standard for donated private stock, using methodologies consistent with those used in 409A work. Note that the 409A safe harbor itself does not automatically satisfy Form 8283 requirements, so a separate engagement may be needed.
Do you buy, sell, or broker 409A equity or private company stock?
No. AppraiseItNow is an independent appraisal firm and does not buy, sell, or broker equity interests of any kind. Our independence from any financial interest in the companies we value is a core requirement for IRS safe harbor qualification and is fundamental to the credibility of our reports.
What information do you need to get started?
To begin a 409A engagement, we typically need:
- Three to five years of historical financial statements, or as much history as is available for early-stage companies
- Three to five years of financial projections, including revenue, expenses, and cash flow
- A current cap table showing all share classes, option pools, and outstanding grants
- Recent term sheets, funding round documents, or transaction records
- Business plan, management presentations, or board materials if available
- Details on any material events such as acquisitions, new financing, or significant changes in the business
Can AppraiseItNow appraise 409A interests for companies located anywhere in the U.S.?
Yes. AppraiseItNow provides 409A valuations for private companies in all 50 states. Because most of the work is document-driven and conducted remotely, location is not a limiting factor. For larger or more complex engagements that benefit from in-person meetings, we can coordinate an appraiser on-site anywhere in the country.
Will my 409A appraisal be accepted by the IRS, insurers, or courts?
Our 409A reports are prepared to meet the IRS safe harbor standard under Section 409A, which requires a qualified independent appraiser using generally accepted valuation methods, with the report dated within 12 months of the option grant date. When these conditions are met, the burden shifts to the IRS to prove the valuation is grossly unreasonable, which is a high bar. Our reports are also structured to hold up in legal proceedings, due diligence reviews, and audits.
What happens if we grant options without a 409A appraisal, or if our valuation is found to be non-compliant?
Non-compliance with Section 409A triggers serious consequences for option holders, not just the company. Affected employees face immediate income inclusion on all unvested deferred compensation, plus interest and an additional 20% penalty tax on top of ordinary income rates. This is why the IRS safe harbor, obtained through a qualified independent appraisal, is so important: it shifts the burden of proof to the IRS and protects both the company and its employees from these penalties.
How often does a 409A valuation need to be updated?
A 409A valuation is valid for 12 months from its date, provided no material events occur that would significantly change the company's fair market value. Material events that trigger an immediate update include closing a new funding round, completing an acquisition, a significant change in revenue or business model, or any other development that a reasonable investor would consider material. While the 12-month rule is the technical standard, most startups update their 409A annually regardless, and many investors expect a current valuation as part of standard governance.
What valuation methods do appraisers use for a 409A, and how do they choose between them?
Appraisers draw on three IRS-recognized approaches: the market approach, which uses revenue and EBITDA multiples from comparable public companies and recent M&A transactions; the income approach, which relies on discounted cash flow analysis; and the asset approach, which focuses on tangible and intangible asset values. In practice, appraisers rarely rely on a single method. A typical report might weight the market approach at roughly 60% and the income approach at 40%, while early-stage pre-revenue companies often lean more heavily on the asset approach due to limited financial history. The methodology, assumptions, and weighting rationale are all documented in the report to support the valuation under IRS review.
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