Services
Common-stock fair market value in cap structures that have outgrown a standard 409A, including OPM, PWERM, Monte Carlo, and lattice methods.
What this covers
Common-stock fair market value for IRC §409A safe-harbor compliance, with depth in capital structures that have moved beyond a simple preferred-and-common stack. Convertibles, SAFEs, secondary tenders, ratchets, participation thresholds, anti-dilution mechanics, and pending material events all change the right method.
When OPM is too coarse and PWERM is too brittle, hybrid methods, Monte Carlo simulation, or lattice models often produce the defensible answer. LHM's job is to choose the method the audit reviewer can defend, not the method that produces the most convenient strike price.
Who this is for
Built for the review audiences who actually scrutinize this work.
When to call LHM
Why this gets complicated
Method selection is the most consequential choice in a 409A, and the one most often handled poorly. OPM is convenient but assumes a single exit and lognormal distribution; PWERM forces explicit scenarios but is sensitive to weighting; Monte Carlo accommodates path-dependent payoffs but requires care in calibration. A reviewer who knows the literature will probe the choice.
Secondary transactions, tender offers, and recent priced rounds require honest treatment under AICPA guidance. So do convertibles and SAFEs that sit between the rounds and the common. The right answer often requires more work than a templated 409A; it almost always requires more documentation.
What LHM evaluates
Standards and review audiences
Deliverables
Related reading
Sep 2026
Before the first option grant, the regulation requires a fair market value conclusion that holds up. What that means in practice, and where the cheap-and-fast version stops working.
May 2026 · 10 min read
In 18 months, OpenAI was “valued” at $157 billion, $300 billion, $500 billion, and $852 billion, through a primary, a structured round, an employee tender, and a recapitalization. Backsolve still works, but the era when it could work casually is over.
Apr 2026 · 9 min read
A small change in volatility moves indicated value materially. That is why the line between “judgment” and “value management” gets watched so closely, and why the most expensive mistake is the one that was never explained.
Most engagements begin with a 20–30 minute conversation about scope, timing, and the right analytical path. There is no charge for an initial conversation.