Comparing Common Stock Valuations in Private Tech

Source: The Information Research. Chart by Peter Schulz.

Disclosures with California state regulators by several private tech firms have opened a window on one of tech’s best kept secrets: the precise 409A valuation put on their common stock and how close that number is to the value of preferred shares issued in fundraisings.

A review by The Information of private tech filings shows a wide variation in valuations put on common and preferred stock between companies, very often but not necessarily reflecting the age of the companies. SpaceX, the oldest company on the list, reported the second highest common stock valuation relative to preferred share prices. It disclosed in July that its common stock fair market value was $73.58, only 5% below the $77.46 paid by investors in January 2015 at a $12 billion valuation.

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This story and the chart have been updated to reflect Snapchat's comment that its 409A and preferred share value are the same. The story and chart were also revised to include updated information on Docker and to clarify the common stock share price for AppNexus. 

Brett A. Hurt and Ali Rahimtula commented on this article.
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The higher a 409A valuation is relative to preferred pricing, the more danger there is of employee options getting pushed underwater if the company has a down round.