409A Valuations: The Cold, Hard Truth for a Startup's Standing

[The Startup Investor]( Tuesday, November 15, 2022 [409A Valuations: The Cold, Hard Truth for a Startup's Standing]( Dear Startup Investor, Understandably, when evaluating a startup investment, one of the most - if not the most - important questions is, "What is the valuation?" After all, this figure determines your eventual payout. Well, it's no secret that valuations have been a hot topic in 2022 for a different, less exciting reason. They were as inflated as practically everything else in the economy. We've wrote ad nauseum about the FOMO conflict that permeated the early-stage investment ranks in 2020 and 2021. If Sequoia Capital is investing in this startup, who am I to say they're wrong? I'd better join them. Unfortunately, those unchecked equations have come home to roost. While the free-for-all atmosphere sent the valuations ballooning, the macroeconomic landscape and catapulting inflation have the spotlight burning particularly hot. It's the same reason we've seen so many startups attempt to avoid the infamous "down round," where the company raises capital at a lower valuation than previous rounds. For these businesses, it's understandable. Those sort of headlines - company X's valuation decreases 44% -- send ripples through public perception. However, these are not the only types of valuations. Companies generate internal valuations, too, -- known as 409A valuations. [And while these are made public less often, they can tell as valuable a story as their counterpart](... The A+E Network Deal Research Team Trending [More vital than oil, gas and precious metals...and the US is almost out]( America's most important resource could run to zero in as little as 25 days. The Northeast has already reached "level 4 - code red" status and more states are being added to the list each day, yet the media hasn't said a word. [Discover the truth about America's greatest resource crisis](. [5 Smart Ways Americans Are Crushing Inflation]( Your money is in grave danger. But there's no reason you have to be a victim. [Here's exactly what you need to do now](. [2 Double- or Triple-Digit Winners a Week]( Tom Gentile launched one of the biggest breakthroughs in investing history. Since April 21, he's racked up 44 double- and triple-digit wins. That's an average of two a week. And his next move could be his biggest ever. [Watch his "3X-your-money-in-a-week event."]( Stay Connected [facebook]( [instagram]( [Money Morning Red Alert] The best way to receive the most timely, actionable opportunities from Money Morning is by joining our text messaging service, Red Alert - free of charge. 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