Earlier quoted context omitted.
for companies raising 9 figure later-stage rounds? that's not obvious to me and relevant to this case, often the investor will do a higher valuation (artificially minting a unicorn etc) for optics/vanity reasons, which eats an additional 1+ years of future growth, eliminating the relevance of a discount here and for folks who many not have followed terms above: investors get preferred shares, with rights over these d…
The people who come up with 409a prices have every incentive to make it as low as possible provided it is somewhat defensible to the IRS. I assure you they can get more creative than saying that the last preferred price was at $X, therefore our hands are tied and the common must be close to that. They can take into consideration the preferred preferences, the current state of the business, the time since the last rou…
And totally agree wrt creative arguments being viable... Just not clear what ends up happening in practice. Ex: I can imagine a split between paper unicorns vs ones w revenue backing it up being closer to market, and those later ones often switching to RSUs. So genuine curiosity here.