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Whitehawk Advisory Releases Study on 409A Valuations

Austin, TX, August 15, 2010 -- Building upon more than five years of experience in delivering IRC 409A valuations to private companies, Whitehawk Advisory has released the results on an empirical study summarizing the results of historical valuations as it relates both to the statistical inputs as well as the results of these valuations. The study, which does not compromise any confidential client financial information, summarizes information including:

  • An illustration of common stock moneyness (relative to liquidation preferences) and its impact on the ratio of common stock option price to transacted preferred equity price;
  • Typical ratios of common stock option price to the price of the most recent round of preferred financing over a 4-year period (2006-2009);
  • The valuation impact of relying solely on a subject company preferred transaction as a method of enterprise value determination in comparison to the utilization of a reverse option pricing method;
  • The quantitative effect of convertible preferred security structure in comparison to participating preferred security structure, all other factors being equal;
  • Average level of unadjusted and adjusted discounts for lack of marketability; and
  • Average level of unadjusted and adjusted discounts for lack of control.

This study is now available on Whitehawk Advisory’s website (www.whitehawkadvisory.com). Questions regarding the study can be directed to info@whitehawkadvisory.com or 512.514.1156.

 

About Whitehawk Advisory
Whitehawk Advisory is an independent investment banking firm focused on serving emerging growth and middle market technology companies. Whitehawk specializes in providing management teams and shareholders of growth-oriented companies with M&A Advisory, Capital Formation and Valuation Services.

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