Preparing for IPO: The Role of 409A Valuation in Stock Option Pricing Before an IPO, a 409A valuation ensures compliance by determining fair market value of common stock for option grants. Accurate pricing protects employees from tax risks and maintains transparency. As companies near public listing, frequent valuations align equity incentives with market expectations, supporting smooth transition to public markets and investor confidence. Visit https://www.whizolosophy.com/category/other-beneficial-approaches/article-essay/preparing-for-ipo-the-role-of-409a-valuation-in-stock-option-pricing