How often do I need to update my 409A valuation?

Update your 409A at least every 12 months while you are granting options, and sooner after a material event. Whichever comes first controls.

The 12-month rule is an outside limit for the independent-appraisal safe harbor. It is not a shelf life you can rely on when the company changes materially in month four.

Refresh early when new information could materially affect value. Common examples include:

• Closing a priced equity round
• A meaningful SAFE, note, tender, or secondary transaction
• Receiving an acquisition offer or beginning a near-term exit process
• A major change in actual or forecast revenue
• Winning or losing a customer that materially changes the outlook
• Launching, acquiring, or discontinuing a major product
• A significant legal development or key-person departure

Do you need a new report every time you sign a contract or move a forecast? No. Materiality depends on the size of the event, the company's stage, and what the prior valuation already anticipated. Ask whether the new information would matter to a willing buyer and seller of the common stock. If it would, document the review and update before the next grant.

The safest operating rhythm is to plan the annual refresh ahead of your board's grant cycle and create a material-event checkpoint for finance, legal, and leadership. Do not let the cap table run on autopilot.

See when you need a 409A valuation for the first-report timeline and what makes a report hold up under scrutiny for the documentation standard. The founder's guide covers both clocks together.