WTF is a 409A?

Why tech companies might actually want a lower valuation

In the past few months, both Stripe and Instacart have seen their internal valuations updated in a 409A appraisal process. The startups saw their valuations being slashed by 28% and 38%, respectively, as a result of the appraisals.

What do these re-pricings signal to other late-stage, pandemic-spurred startups? And how seriously should we be taking them? We spoke to Carta, AngelList, EquityZen and others to better understand the 409A process, and why tech companies might actually want a lower valuation in this moment.