Secondary Market Transactions and Their Impact on 409A Valuation

Secondary market transactions, where private company shares are bought or sold by investors, can significantly influence 409A valuations. These transactions provide real-world pricing data that valuation experts consider when determining fair market value. However, factors like transaction size, investor sophistication, and timing are carefully assessed to ensure accurate valuation outcomes.

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Secondary Market Transactions and Their Impact on 409A Valuation
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Secondary Market Transactions and Their Impact on 409A Valuation

The startup ecosystem thrives on access to capital and talent, but another equally important factor fuels its growth: equity. For many companies, stock options are not just a compensation tool but a way of aligning employees’ incentives with long-ter