Does Pulley's Shutdown Invalidate Your 409A Valuation?
Author: Redwood Valuation Content Team
Published: September 24, 2026
Pulley's shutdown does not, by itself, invalidate a 409A valuation Pulley already issued. A valuation reflects the fair market value (FMV) of your company's common stock as of its valuation date, based on the facts and circumstances at that time. A later provider shutdown does not change those facts. For options already granted using that FMV, the shutdown itself does not change the grant-date valuation analysis. Instead, the shutdown creates practical risks: access to the records behind the valuation, ongoing support if it is questioned later, and continuity when your next valuation is prepared.
Why a Provider Closing Does Not Undo a 409A Valuation
Under the Treasury regulations, the question for private-company stock is whether fair market value was determined by the reasonable application of a reasonable valuation method, judged on the facts and circumstances as of the valuation date. Relevant factors include the company's assets, the present value of anticipated future cash flows, the market value of comparable companies, recent arm's-length transactions in the company's stock, and other factors such as discounts for lack of marketability.
None of those factors depend on whether the firm that issued the report is still operating. If a valuation was reasonable when it was prepared, Pulley's December 8, 2026 shutdown does not retroactively make it unreasonable; if it had weaknesses, the shutdown does not cure them. A provider's later shutdown also does not determine whether a safe harbor presumption applies. A qualifying independent appraisal, for example, is presumed reasonable unless the IRS can show that the valuation method or its application was grossly unreasonable. Whether that presumption applies depends on how the valuation was performed and when it was used, not on whether the provider is still in business.
What Actually Makes a 409A Valuation Stale
A valuation's usefulness for new option grants is limited by time and new information, not by what happens to its provider. Under Treas. Reg. §1.409A-1(b)(5)(iv)(B)(1), it is not reasonable to rely on a previously calculated value in either of two situations: if it was calculated more than 12 months before the date it is being used, or if it fails to reflect later information that may materially affect the company's value. We cover how that standard works in practice, including which events commonly prompt an update, in our “409A valuation refresh schedule guide”. For more on the presumptions of reasonableness, see our 409A safe harbor guide.
The practical point is that Pulley's shutdown and the question of whether you can still rely on an existing valuation run on separate clocks. A Pulley valuation can remain usable after December 8, and it can become stale before December 8, depending on its date and whether later information may materially affect your company's value.
Where the Pulley Shutdown Does Create Risk
Records. A valuation you cannot produce is hard to rely on. Preserve the final report, the information and supporting documents your company supplied for the valuation, and the corporate records showing the FMV and option grants that relied on it. Those company-side records connect the appraisal to the grants it supported; the appraiser's internal workpapers are a different category of record. Pulley says the app experience will no longer be accessible as of December 8. Your company will retain limited-format access to its Pulley data through the app until January 31, 2027. Our Pulley shutdown checklist covers what to download.
Support. Valuations are often examined long after they are issued, in an audit of stock-based compensation, in financing or acquisition diligence, or in an IRS examination of option grants. When that happens, someone has to explain how the value was derived. Pulley's FAQ says Carta can accept an existing Pulley 409A and FMV as-is if you provide a copy. It also says Carta will support the defense of Pulley's prior 409A work following the transition. The FAQ does not define what that support includes. If you migrate to Carta, confirm what it means in practice: who will answer audit or diligence questions, what records will be relied on, and how questions about Pulley's original analysis will be handled. If you are going somewhere else, ask the same questions of the new valuation provider. We look at what to ask in our article, “Does Carta Defend a 409A Valuation It Didn't Perform?”.
Continuity. Preserving the file is one issue; giving your next valuation team enough context to explain what changed is another. The prior report and company-side supporting records can help that team distinguish changes in assumptions, methodology, or company circumstances from one valuation date to the next. That context is especially useful if someone later compares the valuations.
What Pulley Customers Should Do Next
Pulley's shutdown itself is not what determines whether an existing valuation remains usable. The practical next steps are to preserve the records, confirm who can support the prior valuation if it is questioned, and time your next valuation for upcoming grants. We cover that timing for Pulley customers in “When Should a Pulley Customer Get a New 409A Valuation?”.
Redwood is an independent valuation firm specializing in 409A valuations. If your company moves its valuation work from Pulley to Redwood, the engagement includes audit support related to both the prior year's Pulley valuation and the valuations Redwood prepares going forward. That support includes helping respond to questions about the prior valuation, but Redwood did not issue the Pulley report.
Talk to Redwood about support for your Pulley-issued 409A valuation.