Be wary of low-cost valuation firms. Some 409A valuation firms use automated statistical models to provide fast, low-cost reports. This comes with two risks:
- Overvalued shares - Low-cost providers reduce compliance risk by over-pricing shares by almost 30–50%. This can de-motivate employees and defeats the purpose of granting equity to attract great talent.
- Due diligence – Reports that are fully automated don’t accurately reflect the value of your business as no due diligence is performed when preparing the valuation. Pulley’s in-house valuation experts undergo a thorough investigation of your business and reports are reviewed by senior staff before they are delivered.
A 409A analyst is like a home appraiser - pick someone who will research your business to accurately assess its value. Our in-house valuation team of experts will understand your business to return a fair and defensible 409A report.