409A Valuation

409A Valuation Services Overview

Accurate 409A Valuations for Growing Companies

Our 409A valuation services are tailored to ensure full compliance with IRC 409A standards, catering to a diverse range of private companies from emerging startups to established middle market companies. With a track record of maintaining client relationships and completing highly complex assignments, our expertise in 409A valuations is extensive. We provide comprehensive 409A valuation analysis and reports that adhere strictly to AICPA Guidelines and IRS mandates. Our pricing model is transparent, offering flat-fee engagements that deliver exceptional value. We always include audit support post-engagement. Each 409A valuation is meticulously conducted by a seasoned valuation expert, emphasizing our commitment to streamlining the process for our clients. By choosing our services, you benefit from our dedication to efficiency, quality, and experience.

Our 409A Valuation Process

Fast, Streamlined 409A Valuations

Our 409A valuation process is designed for efficiency and clarity. It begins with your provision of essential documents as requested in our Initial Information Request. Once we receive your documents, we'll acknowledge receipt and commit to a timeline, aiming to deliver a draft valuation analysis within 10 business days. We encourage you to review this draft and provide any feedback or raise questions, enabling us to refine the analysis and address your concerns. The process culminates with the delivery of the final valuation report, ensuring a comprehensive and accurate reflection of your company's value in compliance with 409A standards.

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Frequently Asked Questions

IRC 409A regulates the taxation of nonqualified deferred compensation, such as stock options and phantom stock. Enacted in 2004, it prevents executives from deferring income to avoid taxes. It requires compliance with rules about deferral elections and payment timing and prohibits acceleration or modification of payments. Noncompliance triggers penalties, including a 20% additional tax on the employee.

A 409A valuation is an independent appraisal of a company's common stock to determine the exercise price of stock options and other equity compensation. It ensures the exercise price is not below the fair market value (FMV) to avoid triggering deferred compensation rules under IRC 409A. A qualified appraiser typically conducts the valuation, which is valid for 12 months unless the company's situation changes materially.

A 409A valuation is legally required when issuing stock options in a private company. Without it, your company risks:

IRS penalties for discounted stock options
Immediate income recognition and tax liabilities for employees
Exposure to interest and additional taxes under Section 409A

An independent valuation provides a “safe harbor”—protecting both your company and your team from adverse tax consequences.

Private companies offering stock options or equity compensation to employees, consultants, advisors, or directors need a 409A valuation to ensure IRS compliance.

To get a 409A valuation, hire a qualified appraiser with experience valuing private companies. The appraiser will need financials, cap tables, and other relevant data to perform the valuation. Once completed, you'll receive a detailed report with the methodology and results. A 409A valuation should be updated at least annually or during material changes.

Whitehawk Advisory specializes in 409A valuations, combining IRS-compliant methodologies with a deep understanding of early-stage and growth-stage companies.

A 409A valuation typically takes 5 to 10 business days to complete, depending on the complexity of your company's data.

The cost of a 409A valuation depends on your business's size and complexity. Contact us for a personalized quote.

It is advisable to conduct a business valuation annually or when significant events occur, such as substantial growth, market changes, or ownership transitions. Regular valuations help track performance and prepare for opportunities or challenges.

The duration varies based on complexity but generally ranges from 2 to 4 weeks. Timely provision of necessary documentation can expedite the process.

Exit planning involves strategizing for a business owner's departure through sale, succession, or other means. It ensures a smooth transition, maximizes business value, and aligns with the owner's personal and financial goals.

Ideally, exit planning should begin 3–5 years before the intended transition. Early planning allows for value enhancement, tax optimization, and addressing potential challenges. It should be tailored to your financial, operational, and personal goals.

We work with businesses at all stages, from early-stage startups needing their first 409A to mature companies planning exits or involved in litigation.

Companies may pursue recapitalization to:

Improve financial flexibility. Prepare for
mergers or acquisitions. Address
changing market conditions. Facilitate
ownership transitions or buyouts.

Tax valuations are essential for complying with IRS requirements in situations like estate and gift planning, charitable donations, or corporate reorganizations. These valuations need to be well-documented and defensible to minimize audit risk.

The timeline for exit planning can vary depending on the complexity of your business and your goals. However, executing a well-prepared exit plan usually takes 6 to 24 months. It's crucial to start the business exit process as early as possible—the earlier we begin, the more time we have to optimize your business's value, address any potential issues, and implement strategies to enhance your returns.

The right time to exit your business depends on various factors, both personal and business-related. We can help you evaluate the best time to exit and establish a strategy that ensures maximum value and a smooth transition, regardless of your business stage.

Recapitalization is restructuring a company's debt and equity to improve financial stability, enable growth, or prepare for ownership transitions.

Austin's fast-paced market demands financial flexibility. It can help you take advantage of growth opportunities or weather economic shifts.

The recapitalization process can take 4 to 12 weeks, depending on the deal's complexity and the capital partners involved.

Yes, depending on your goals. We design solutions that balance funding with control preservation.

A gift & estate tax valuation determines the fair market value of assets being transferred through an estate or as gifts. These valuations are essential for calculating estate and gift taxes and ensuring compliance with IRS requirements.

Common assets that require valuation include:

Real estate
Businesses
Personal property
Investments
Life insurance policies and more.

The value of your estate is determined by assessing each asset at its fair market value (FMV), which is the price it would sell for in the open market. For real estate, this might involve a comparative market analysis; for personal items like art or jewelry, appraisals from specialists may be required.

The time it takes to complete a gift & estate tax valuation depends on the complexity of the estate and the types of assets involved. Typically, the process can take a few days to several weeks. After the initial consultation, we will provide a more accurate timeline based on your needs.

A litigation advisor provides strategic guidance to businesses facing legal disputes, helping them navigate the legal process and mitigate risks.

Contact a litigation advisor early to assess your legal options, decrease threats, and build a strategy for handling the situation effectively.

By hiring a litigation advisor, you can address legal issues, lowering the need for expensive court battles and achieve better outcomes through strategic negotiations.

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