Can I just do my own 409A valuation internally? Seriously, why not?

You can. The question is whether you should.

The legal reality: Nothing in the tax code prohibits a company from determining its own FMV internally. But you lose the independent appraisal safe harbor, which means you lose the presumption of reasonableness. If the IRS challenges your valuation, the burden is on you to prove it was correct — not on them to prove it was grossly unreasonable. That's a much worse position.

The start-up safe harbor angle: If your company is less than 10 years old with no public securities and no reasonable anticipation of a change of control or IPO within 180 days, you can potentially use the "start-up company" safe harbor. This allows someone internal to do the valuation — but that person must have "significant knowledge and experience or training in performing similar valuations." Your first-time CFO with a finance degree probably doesn't qualify. A board member who's a former investment banker might.

Why it's a bad idea in practice:

1. Bias is obvious. You have every incentive to set the price low. The IRS knows this. An acquirer's diligence team knows this. Everyone knows this.
2. Technical complexity is real. OPM allocation, DLOM analysis, volatility estimation — these aren't spreadsheet exercises you can Google your way through. Getting it wrong isn't just an academic mistake, it's a tax liability for your employees.
3. Cost-benefit is terrible. You'll spend 20–40 hours of senior employee time to produce something less defensible than a $3,000 independent appraisal. That math doesn't work.
4. It signals to investors and acquirers that you cut corners. Due diligence teams notice. It creates friction at exactly the wrong time.

The one exception: Very early stage (pre-funding, just incorporated, no revenue, no assets beyond IP). A board resolution setting FMV at par value or nominal value is sometimes acceptable. But the moment you take outside capital, this window closes.

My honest advice: pay the money, get the independent report, and focus your time on building the company. When you're evaluating firms, look for credentials (ASA, CFA, ABV), turnaround time, and whether the firm has experience with companies at your stage.