409A Valuations

409A valuation opinions from a professional third-party on the fair market value of your private company's common stock.

SVB Analytics understands the unique challenges private companies face in complying with tax and financial reporting requirements. Private companies are required by the IRS (Section 409A) to show that their common stock options are issued at fair market value, and therefore must conduct a formal valuation opinion at least once every 12 months to avoid potential tax penalties. They also must use the fair-value method of accounting for stock-based compensation such as stock options to comply with the Financial Accounting Standards Board rules (ASC 505 and 718).

Our commitment to quality provides clients with a well-documented, auditable valuation report that can be used for both tax and financial reporting purposes. Our understanding of a client's business and its position in the industry, as well as strict adherence to industry-standard valuation and allocation techniques, enables clients to rest assured that their third-party valuation opinion is audit-defensible.

The 409A Valuations Leader for Venture-Backed Companies 

SVB Analytics, an affiliate of Silicon Valley Bank, has performed more than 5,500 valuation opinions for venture-backed private companies since 2006. We use this deep experience to provide the most informed value indicators to help private companies efficiently comply with regulations and requirements.

• Better insights: SVB's focus on technology, life science, and cleantech companies for more than 25 years allows us to identify, observe and analyze trends better than any other valuations provider.
• Deep relationships with auditing firms: We work closely with the Big Four accounting and auditing firms, as well as with regional firms around the country, so we can understand and rapidly adapt to changing audit requirements and valuation best practices.
• Strict adherence to accepted guidelines: Our opinions adhere to the American Institute of Certified Public Accountants (AICPA) guidelines in enterprise valuation and allocation methodologies.
• Scalable solutions: We have the capacity to complete high-quality work for any sized company — from early stage to acquisition or IPO, and beyond — in a timely manner.
• Successful results: Every major audit firm has reviewed and approved our work.

Auditable Valuation Reports

• Methodologies sanctioned by the AICPA Practice Aid and that conform with IRS regulations
• Industry-standard valuation and allocation techniques
• A thorough, well-documented and auditable report that can be used for both tax and financial reporting purpose
• Support from our engagement partners during your audit process

Appropriate Comparable Company Selection

• Derived from both qualitative and quantitative factors relevant to the technology, life sciences and cleantech sectors
• Supported by extensive analytics on the selected guideline companies to assist our clients in benchmarking the valuation of their companies

Tailored Allocation Methodologies

• Income / market / cost approaches
• Current Value Method (CVM)
• Probability Weighted Expected Return Method (PWERM)\Option Pricing Method (OPM)
• An option pricing model and waterfall analysis that accounts for the rights and preferences of the preferred shareholders
• Probability-weighted scenario modeling analytics, which may better reflect the distribution of potential outcomes for companies in certain industry sectors such as life science and cleantech

Accounting for Mergers and Acquisitions

• Stay in compliance with accounting rules for mergers and acquisitions. New regulations approved by the Financial Accounting Standards Board include significant changes in reporting requirements for acquired assets and liabilities. SVB Analytics offers expert ASC 805, ASC 350 and ASC 360 analyses to ease the valuation and reporting processes and minimize potential challenges by external auditors or the SEC. For more information on these services please click here.