409A Valuations for Private Technology Companies

The Brenner Group® has provided independent third-party valuations for IRC 409A compliance, in addition to supporting the implementation of SFAS 123(R) and for litigation support. To determine value, our professionals analyze each client's business and financial plans, history, and projections. We have been engaged by more than 300 clients to value securities and options for tax, financial reporting requirements, and other purposes.

Why is an IRC 409A valuation important to a venture capital portfolio company?

Under IRC Section 409A, first released in 2005, privately owned companies such as those in Silicon Valley are now required to establish that stock options are being issued at no less than fair market value at the time granted in order to avoid a potential painful tax liability for both the company and the grantee. Companies either considering or currently issuing stock options should consider an independent IRC 409A valuation annually and more frequently if there is a positive change in the business which could result in a change of the implied market value of the common stock.

What is the process for an IRC 409A valuation?

The Brenner Group assigns a team of experienced professionals and expeditiously performs a rigorous independent IRC 409A valuation incorporating standards published by the IRS and the AICPA. All of our IRC 409A valuations are performed by senior professionals of the firm. The IRC 409A valuation process includes in-depth analysis of the company and its industry, in addition to interaction with client financial staff; normal turnaround time is approximately three weeks. The Brenner Group delivers a written fair market value of the common stock based on multiple valuation methodologies and includes detailed calculations that support the conclusion

What makes an IRC 409A valuation from The Brenner Group unique?

The Firm only employs its own staff in the production of IRC 409A valuations, and is one of the leading valuation firms serving venture capital backed companies. Our specialty is technology companies and we have served such clients with our financial services since 1987. Additionally, The Brenner Group defends its IRC 409A valuations and assists clients with auditors or other outside entities that seek clarification of the IRC 409A valuation opinion.

SFAS 123R

We routinely assist many clients with their compliance with SFAS 123(R)