409A valuation vs last round price

These are the two numbers people reach for to value private shares — and they can be very far apart. Knowing which is which is the key to a realistic estimate.

The short version

The last round price is what investors paid for preferred shares — the headline valuation. The 409A valuation is an independent appraisal of common shares, usually much lower. Your real value sits closer to the 409A, with a secondary price somewhere in between.

Side by side

	409A valuation	Last round price
What it values	Common stock	Preferred stock
Who sets it	An independent appraiser	Investors in the round
Purpose	Setting option strike prices (tax)	Raising money / headline valuation
Level	Lower — often a fraction of the round price	Higher — the number in the press
Use for a sale	A floor reference for common	A ceiling reference before discounts

How to use both to price a sale

Think of the 409A as a floor and the last round price as an optimistic ceiling. A realistic secondary price usually lands between them, after applying illiquidity and minority discounts to the round price. Our valuation guide and estimator work through this.

Watch out: quoting the last round price as 'what my shares are worth' overstates it — that's the preferred price, not your common's realistic sale value.

Frequently asked questions

Why is the 409A valuation lower than the last round price?

Because they value different things. The 409A appraises common stock, which sits behind preferred and carries fewer rights, while the last round price is what investors paid for preferred shares. The 409A is deliberately conservative and is often a fraction of the headline round price.

Which number should I use to value my shares?

Neither alone. Use the 409A as a floor for common and the last round price as an optimistic ceiling, then expect a realistic secondary price between them after illiquidity and minority discounts. The headline round price overstates what your common would actually sell for.

Can I sell my shares at the last round price?

Rarely. That price is for preferred shares bought by investors; your common shares are worth less and, in a secondary, are discounted further for illiquidity and minority status. Expect an offer below the last round price.

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