Does Carta Defend a 409A Valuation It Didn't Perform?
Author: Redwood Valuation Content Team
Published: September 21, 2026
If you are moving from Pulley to Carta before Pulley's December 8, 2026 shutdown, the two companies are offering an assisted cap-table migration. Your historical 409A valuations are a different matter. The distinction matters most at the worst possible time: during an audit or a deal.
Does Carta Defend Pulley’s Historical 409A Valuations?
A 409A valuation report is more than another record to migrate. It supports a determination of the fair market value of a private company's common stock. Pulley advertised lifetime audit support for valuations performed by its in-house team. Pulley's public shutdown notice confirms an assisted migration to Carta. Founder Yin Wu has also said that Carta committed to honoring existing Pulley contract terms. But the public transition statements do not specifically say whether Carta will defend historical Pulley 409As. Migrating the records and defending those valuations are different commitments, so that point is worth confirming in writing.
What to Ask Carta Before Migrating From Pulley
So before you assume you are covered, ask your migration contact directly:
Will Carta stand behind and defend the specific prior 409A opinions I am inheriting from Pulley, or is Carta only hosting the cap table going forward? If one of those inherited valuations is challenged by my auditor or the IRS, who provides the analysis and support? Is the firm that actually performed the original work still involved, or is it gone?
These are fair questions, and the answers determine whether you have real coverage or just a data export.
Who Should Handle Your 409A Valuations Going Forward?
The migration also raises a forward-looking question: who do you want handling the valuation itself? A 409A that comes bundled with the software you already use for equity management is convenient, but convenience is not what makes the valuation defensible. For private-company stock, the 409A regulations focus on whether fair market value was determined through the reasonable application of a reasonable valuation method. An independent appraisal is one route to a presumption of reasonableness. But the rules do not require the cap table platform and the valuation provider to be separate companies. If you are re-papering your equity stack anyway because of the Pulley shutdown, it is a natural moment to decide whether you want both services from the same vendor or prefer a separate valuation specialist.
Independent 409A Valuation Support After Pulley
Redwood is an independent valuation firm. If you move your valuation work from Pulley to Redwood, we take over your account and include audit support for your prior year's valuation as part of the package. If that inherited 409A gets questioned, you have a firm that will actually defend the analysis rather than a support ticket.
The cap table platform and the valuation firm are separate decisions. Make the second one deliberately. Talk to Redwood before December 8.
Frequently Asked Questions
How long is a 409A valuation valid?
A 409A valuation may generally support reliance for up to 12 months from its effective date, provided no information emerges in the interim that may materially affect the company's fair market value (FMV). Both conditions matter: a valuation less than 12 months old may still no longer support reasonable reliance when a material event has occurred. Either trigger (time elapsed or new material information) is sufficient on its own to make continued reliance unreasonable.
Is there a 90-day rule for updating a 409A after a material event?
No. There is no regulatory requirement to refresh within 90 days or within any other specific number of days after a material event. In our practice, many companies seek updated valuations promptly after potentially material events. That is industry convention, not a statutory rule. The actual regulatory standard asks whether new information may materially affect the company's value; it specifies no day count.
What events require a new 409A valuation?
No exhaustive regulatory list exists. Events that commonly prompt companies to consult their appraiser include new funding rounds, down rounds, M&A discussions, and significant changes in financial performance. Whether a specific event warrants a refresh is a fact-specific determination, and not a board determination alone. Consult the appraiser when uncertainty arises.
Does a material event invalidate past option grants?
Generally not. Staleness under the regulation applies to grants made after the staleness point. Prior grants issued under a then-current valuation are typically not retroactively affected by subsequent material events. Only prospective grants require a valuation that continues to support reasonable reliance.
Do we need a new 409A after a SAFE?
Not automatically. Material SAFE activity may make continued reliance on the prior valuation unreasonable, but the determination is fact-specific. A single small SAFE may not warrant a refresh. A series of material SAFE closings, particularly where the total amount represents a meaningful change in capitalization or business expectations, may warrant a conversation with the appraiser.
How often do pre-IPO companies update their 409A?
Typically quarterly or more frequently in the 12–18 months before an anticipated offering. Companies relying on the illiquid start-up method (Method 3) should also note that Method 3 generally becomes unavailable once an IPO is reasonably anticipated within 180 days. At that point, the company would generally need to rely on Method 1 (independent appraisal by a qualified independent appraiser) to maintain reliance on the rebuttable presumption of reasonableness. The quarterly cadence is industry practice; the Method 3 threshold is regulatory.
How long does an annual 409A renewal take?
For routine renewals with no material changes, many providers complete the engagement in 2–5 business days from document submission. Complex situations, or those involving material events since the prior valuation, take longer. In our practice, most valuations are completed within 3–4 weeks of receiving complete information. The clock starts at information receipt, not at engagement signing.
About Redwood: Redwood Valuation provides IRS-compliant 409A valuations tailored to private companies navigating complex equity and liquidity events, including methodology selection like PWERM and OPM. We work with venture-backed companies at all stages to deliver independent, audit-defensible valuations that reflect current market dynamics, capital structure intricacies, and strategic exit scenarios. Our reports are prepared by credentialed appraisers and designed to support compliance, informed decision-making, and clear communication with employees, auditors, and other stakeholders.
Learn more about our 409A services | Schedule a consultation | When in doubt, please reach out.