Secondary Market Sales and 409As

With the attractiveness and increasing popularity of marketplaces for pre-IPO stock, like SecondMarket, there is growing debate over how transactions in private company
stock impact the value of company securities for 409A purposes.  At the core of these discussions is the question of whether a transaction occurring in a private marketplace is a strong indication of value. In this article we offer guidelines for valuation professionals and company executives to consider when assessing the impact of such secondary transactions on the fair market value of private company stock.

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