409A Valuation vs. Cap Table: Why They're Not the Same Thing
Author: Redwood Valuation Content Team
Published: September 21, 2026
Founders often use "409A" and "cap table" as if they describe the same thing. They do not, and Pulley's announced shutdown makes the distinction impossible to ignore.
Your cap table is a ledger of the company's capitalization. It records shares and tracks instruments such as options, warrants, and SAFEs that can affect ownership over time, along with key terms. It is structured data. You can export it from one platform and import or migrate it into another. The reconciliation can be tedious, but the underlying records are portable.
Your 409A valuation is not just data. It is an analysis of the fair market value of your common stock. For nonpublic stock, Section 409A requires a reasonable application of a reasonable valuation method. A qualifying independent appraisal receives a presumption of reasonableness. Your company can use that FMV when setting option exercise prices. But the valuation alone does not place every nonstatutory stock option outside Section 409A. The exercise price must be at least FMV on the grant date, and the option must meet the other stock-right conditions. The larger point is that a 409A is more than a file to migrate. It is a valuation conclusion that someone may later have to explain and support.
That Difference Has Three Practical Consequences
First, portability. Cap-table records can move between platforms. A valuation report can move as a file, too. What does not automatically move with the report is responsibility for supporting the analysis. That depends on the valuation provider and the transition arrangement.
Second, scrutiny. A cap table can be reviewed in a financial statement audit or M&A diligence, but the question is whether the ownership and security records are accurate and complete. A 409A faces a different question: how was common-stock FMV derived, and were the valuation method and assumptions reasonable as of the relevant grant date? The distinction is not scrutiny versus no scrutiny, but scrutiny of the records versus scrutiny of the valuation analysis.
Third, responsibility. A cap-table platform maintains records. A valuation provider issues the appraisal and supports the analysis. When one company does both and then shuts down or hands you off, those functions have to be untangled. Pulley's transition to Carta addresses both. Its September 15, 2026, shutdown FAQ says customers who transition to Carta can migrate their cap-table data and equity records. It also says Carta can accept existing Pulley 409A valuations and support the defense of Pulley's prior 409A work. That is a specific successor arrangement, not something to assume automatically with a different provider.
Final Thoughts
The takeaway for anyone leaving Pulley is simple: do not ask only where your cap table is going. Ask what happens to your valuation support, too. If you move to Carta under Pulley's transition, Pulley says both cap-table migration and support for prior 409A work are addressed. If you choose another provider, confirm separately how your cap-table data will migrate and where your valuation reports will be retained. Then ask who, if anyone, will support prior valuation work after Pulley ceases operations.
Redwood is an independent valuation firm specializing in 409A valuations. If you are sorting out your equity stack as Pulley winds down and want a valuation provider separate from your cap-table platform, we can help you handle the part that is easy to overlook.