Flash 409A for early stage companies
Eligible early stage companies will now automatically receive a new draft 409A report the day after their previous one expires.
What’s important about this change?
By automatically sending you a draft of your 409A, we’re removing the need for customers to manually request a new 409A. You will have the opportunity to review and request changes before the new valuation takes effect.
How does it work?
Carta will draft your report using your Carta cap table information and broader market data of similar companies within the same industry, stage, and size. This allows us to provide an accurate and defensible fair market value (FMV) for use when issuing or exercising options.
On the day following expiration and if you have not already submitted a request for an updated valuation, Carta will prepare a valuation and send you a notification once the 409A draft is ready for review. You will also see a new task appear in your company dashboard.
What do I need to do?
All you need to do is review and accept the new FMV. The new FMV will be applied to your account after acceptance.
It is important to note that we assume the following when performing our analysis:
- Your Carta cap table is up-to-date
- No acquisition letter of intent has been signed
- Your company maintains a cash runway of one to two years
- There have been no significant business changes since your previous 409A
If any of these assumptions are incorrect, or if you have questions about your report, contact the Carta Valuation team at email@example.com before accepting your new 409A so we can make adjustments to your concluded FMV.
Who is it available for?
Corporations that have 409A in their subscription and meet the following requirements:
- Series B stage or earlier
- Post-money valuation of less than $100M
- Revenue of less than $20M
- No common stock sales within the last 6 months
In addition, our valuation analysts will conduct individual reviews before sending a draft.
How do I learn more or get help?
Contact the Carta Valuation Team at firstname.lastname@example.org, or from the 409A ledger in your Carta account.
Customers can learn more about Flash 409A here.