409A Valuation
An independent valuation of a US company’s common shares used to set option strike prices.
Required for US (e.g. Delaware) companies, a 409A valuation establishes the fair market value of common stock so employee options are priced compliantly with IRS rules. UK companies use HMRC-agreed valuations for EMI instead, but founders raising in the US will encounter 409A.
Examples
A flipped startup commissions a 409A before granting US options. — Option strike prices are set from the latest 409A.
How it relates to The Startup Foundry
For UK founders, EMI valuations are the equivalent; the Foundry helps you grant equity compliantly to build your team.