eShares Tackles The Headache Of Startup Valuations By Offering “409A-As-A-Service”

TechCrunch

eShares , a company trying to replace paper records for stock options and shares , has expanded its product lineup to include something called “409A-as-a-service.”

To be honest, until speaking with co-founder and CEO Henry Ward, 409A didn’t mean anything to me. Apparently it refers to a section of the corporate tax code around the valuations used for employee stock options. Ward suggested that these valuations can be a pain, not just because of the cost ($3,000 to $5,000) but also because they need to be redone periodically, unless the startup is willing to risk the wrath of the IRS.

As the product name implies, eShares is trying to take a software-as-a-service approach to the problem. At a monthly rate of $159, Ward said the company’s 409A-as-a-service should only cost half as much as the traditional valuation process. Plus, in addition to getting a long report, eShares also provides a…

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