Each 409A Valuation - Get A Different Firm?

I usually switch after using a valuation firm twice. The last group I used was Greener Ventures www.greenerventuresllc.com and they were very good both in quality and price.

If it is a reputable firm, I don't think there is any change required. However, I have found it interesting to see the differing styles of different providers, and that can be worth the headache of breaking in a new firm and their analyst. However, there is a learning curve, so the headache will be there.

I tend not to switch just for the sake of switching. There is no requirement under 409(a) to switch that I am aware of and I like to have a valuation firm that understands our business as my partner. Additionally, the cost tends to be 20%+ less than getting a new valuation when they are updating from a prior valuation. The key issue here is that the Board must establish that the valuation they are using is the current fair market value each time a stock option is granted or a deferred comp plan is approved, etc. You / they must evaluate the changes in the business, revenue growth, changes in profitability, etc. to make that determination but as a rule of thumb, we look at it every 6 months and rarely use the same valuation for more than 1 year - especially in a startup or high growth business.

Assuming that you are granting options or restricted cost based on fair value, it seems odd that you have left it 20 months since your last 409A valuation. The safe harbor rule requires an independent valuation annually, or when valuation enhancing events take place. If you have a good relationship with your valuer, and you (and your auditor )are satisfied with their valuation process, than I suggest you stick with him. A change may be better, same, or worse, .... a 67% chance of being better off by not changing!