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409A Valuation Calculator

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Important Tax Disclaimer

This calculator is provided for informational and educational purposes only. It is NOT a substitute for professional tax advice. Tax laws are complex and subject to change. The calculations and scenarios presented here are simplified estimates that may not reflect your specific tax situation. Always consult with a qualified tax advisor, CPA, or tax attorney before making any decisions regarding stock option exercises, tax planning, or financial strategies. Your actual tax liability may differ significantly from these estimates.

409A FMV
$0.90
per common share
Preferred Price
$1.00
Last round price
Discount Applied
35%
DLOM discount
Revenue Multiple
5.3x
Implied valuation

Exercise Cost Analysis

Options to Exercise:10,000 shares
Exercise Price:$0.90/share
Total Cost:$8,970
Current Value:$8,970

Tax Impact Summary

ISO Tax Treatment
AMT Income:$0
AMT Tax:$0
Effective Tax Rate:20.0%

Company Valuation Inputs

$
19 months ago
$
%

Valuation Adjustments

35%
Discount for lack of marketability
For DCF valuation method

Valuation Methods Comparison

Last Round

40% weight
$50,000,000

DCF

30% weight
$55,464,491

Comparable

20% weight
$37,500,000

Asset-Based

10% weight
$25,000,000

Weighted Average Valuation

$46,639,347

Stock Option Analysis

Select your marginal tax rate

Projected Option Value Over Time

Tax Strategy Comparison

Early Exercise (Now)

Exercise at current 409A FMV

  • No immediate tax (ISO) or minimal spread (NSO)
  • Start capital gains holding period
  • Risk: $8,970 cash outlay
  • File 83(b) election within 30 days

Exercise at Liquidity

Wait until acquisition or IPO

  • No upfront cash required
  • Higher tax on larger spread
  • NSO: Ordinary income tax on full gain
  • ISO: Potential AMT issues

Exercise After Vesting

Exercise vested shares periodically

  • Moderate cash outlay over time
  • Manage AMT exposure (ISO)
  • Some long-term capital gains
  • Balance risk and tax efficiency

Key Insights & Recommendations

  • Current 409A valuation is 90% of preferred price
  • Exercising 10,000 options requires $8,970 in cash
  • AMT exposure of $0 may trigger $0 in additional tax
  • Break-even stock price: $1 (including taxes)
  • Consider early exercise if you believe in >3x growth and can afford the cash outlay