What
is IRC 409a
Section 409A sets new requirements on a broad range
of nonqualified deferred compensation plans and arrangements
and imposes stiff penalties for noncompliance. It’s
passage has resulted in a flurry of valuation activity.
MK Appriasal Group's solution is targeted toward the
Board seeking a high-quality appraisal. We don’t
dabble in valuation…...and neither should your
409a valuation services provider.
409a Valuations: Practical Requirements
– Where and Why Spend the Money!
Many anticipate that companies
in the middle stages of development (when significant
assets and operations exist) will obtain periodic,
independent appraisals of stock value for purposes
of setting exercise price in their stock options.
Key motivations for such periodic expenditures include
the obvious protection provided by the “Independent
Appraisal Presumption” as well as the liability
concerns of many boards. Another motivation for private
company management is the emerging auditor propensity,
under FAS-123r, to require valuation of stock options
for financial accounting purposes.
The
Qualified 409a Appraisal Firm!
It is true that there are a limited
number of appraisers uniquely qualified to value a
private technology company enterprise plus accurately
account for these companies’ complex capital
structures. Our qualifications:
Defensible
Results…………….
First, the valuation must hold up under potential
IRS scrutiny; the appraiser must therefore have
expertise in rendering Fair Market Value appraisals,
a firm grasp of valuation discount/premium applications
and experience defending FMVconclusions. Our formula:
in-depth interviews, solid timely research, models
that “hold-together”, comprehensive
appraisal reports & reasonable results.
Experienced
with Technology Companies………..
Second, most entities that require a 409a valuation
are technology-based enterprises. Deep experience
with technology business models is essential to
successful and efficient valuation of technology
companies. We have experience valuing a wide range
of technology companies – and we know the
obvious (and the subtle) nuances of technology company
operations.
We Know
Complex Capital Structures………...OPM,
PWERM Modeling Expertise
Thirdly, an understanding of the unique capital
structures and venture capital financings of these
enterprises is necessary. We understand the VC community,
the Venture Capital Method and we know our way around
term-sheets and cap tables. And, we can model any
complex capital structure—using multiple methodologies!
We Glide
through the Audit Process………...
The IRC 409a valuation that we complete for your
and your Board may be used for financing reporting
& accounting purposes. Who better to depend
on than a firm with a solid reputation responding
to thorough GAAP Fair Value audits.
………...The
Qualified 409a Appraisal Firm: MK
APPRAISAL GROUP
It is no accident, then, that the established appraisers
of MK Appraisal Group have varied backgrounds and
expertise. Such a diversity of expertise is here
to provide you with very thorough, highly defensible,
quality IRC 409a value opinions.
