The US Internal Revenue Code has numerous regulations which must be adhered to in order for companies to reach compliance standards. One such regulation, Section 409A of the IRC, governs the complexities of setting strike prices for employee stock options and requires that companies be properly audited before issuing stock options as employee compensation.
Often there is some confusion as to what the difference is between a so-called 409A valuation as required by the IRS, and a valuation to raise money. Venture Valuation compiled a white paper to provide a short overview of the key differences.
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