Many founders, like Alyssa, worry that a 409a valuation is considered a true market-based assessment of a company’s overall worth or potential. It is not. Heidi points out factors that influence a 409a valuation along with what is not reflected, namely, leadership, team quality, and disruptive potential.

More information: https://www.threshold.vc/podcast/the-case-of-the-409a-freak-out

Further Reading:

Carta provides a pretty comprehensive discussion of 409a’s here: https://rb.gy/z4vsky
While we all think of 409a’s in the context of getting a valuation for common shares, it stems from The Internal Revenue Code, section 409a. A little ‘fun’ (if you think of the Enron bankruptcy as fun) history here: https://www.equityeffect.com/blog/irc-409a-overview-409a-valuations-explained/

The Case of the 409a Freak-out