A 409(A) valuation is a formal report that sets the current value of an investment portfolio company’s common stock and the strike price to exercise an option to purchase the stock. Typically a company hires a professional appraiser to prepare the report since stock options set at a strike price below the current value of the common stock can result in large tax penalties to the option recipient. Section 409A of the United State’s tax law requires that the strike price (the set future price per share to exercise a stock option) not be lower than the current value of a share of the investment portfolio company’s common stock on the date that the stock option is issued. When an SPV invests into a startup company, knowing what the annual 409(a) valuation is could provide an update on how the company is performing.