Sign up FAST! Login

409A Valuation recommendations?

Stashed in: Fixitfixitfixit!

To save this post, select a stash from drop-down menu or type in a new one:

I was wondering whether people had recommendations for a 409A valuation firm? Also, what are your key considerations in choosing a firm?

I am looking for a firm with the following criteria:

1. Credible (i.e. have done many 409A valuations for Valley start-ups) 2. Inexpensive (and will bundle a low price for ongoing quarterly updates) 3. Valuation methodology that does not predominantly weigh preferred share price. As valuations have risen in recent months for companies with low to no revenue, I would like to see the valuation report more grounded by those cash flow fundamentals.

Any feedback would be appreciated.

I interviewed several firms for Renkoo and did not find any to be exceptionally in tune with the needs of a small private company.

I decided on SVB Analytics which did it for us twice -- once for $7500 and once for $9000 -- and I thought they did a reasonable job.

Each time they used more than one method that came up with valuation, and ended up with a valuation that was between 15 and 20 percent of the preferred stock price at that time.

They did use a cash flow analysis to keep the valuation relatively low.

Recently I was impressed with what WTAS has to say about 409A.

Specifically:

Although IRS has not invested significant resources reviewing 409A appraisals to date, IRS has recently indicated that they now intend to focus on 409A valuations.

I'm happy to make an introduction if you're interested.

I highly recommend Jim Timmins of Teknos. He has done them for several portfolio companies of mine, and he's very good. Use my name with him. Best, Lara

You May Also Like: