Valuation methods & enterprise value · Specialist
409A valuation
Also called: 409A
ELI5
A US tax-focused valuation of common stock used for certain equity compensation purposes.
Used in conversation
“The valuation memo needs to state the assumptions behind 409A valuation.”
Pitch context
You will see “409A valuation” in financial models, budgets, board packs and investor materials when the discussion reaches valuation methods & enterprise value.
Why it matters: In valuation methods & enterprise value, a loose definition can change rights, obligations, approval, disclosure or enforceability.
Caution
Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.
Sources & evidence · 9
Direct term-level sources and supporting source families.
- Y Combinator — Safe financing documentsDirect source · practitioner · checked 2026-08-16
- National Venture Capital Association — Model Legal DocumentsDirect source · institutional · checked 2026-08-16
- IFRS Foundation — IFRS GlossaryDirect source · primary · checked 2026-08-16
- U.S. Securities and Exchange Commission — Small Business Capital Formation GlossaryDirect source · primary · checked 2026-08-16
- U.S. Securities and Exchange Commission — Exempt OfferingsSupporting source family · primary · checked 2026-08-16
- Y Combinator — Series A Term Sheet TemplateSupporting source family · practitioner · checked 2026-08-16
- Financial Accounting Standards Board — FASB Accounting Standards CodificationSupporting source family · primary · checked 2026-08-16
- U.S. Small Business Administration — Break-even pointSupporting source family · primary · checked 2026-08-16
- U.S. Securities and Exchange Commission — Non-GAAP Financial Measures — Compliance and Disclosure InterpretationsSupporting source family · primary · checked 2026-08-16