All the startups granting options need to get a 409A valuation done, thru third parties to establish the common stock price of your company. As a rule, the options can be granted with a strike price equal to or greater than the value of the stock established in 409A report ( A Fair Market Value – FMV). Therefore, all Startups must perform the business valuation before they grant the options to justify the exercising price they set. The risk of non-compliance with the IRC 409A is severe. If this code is violated, the option holders must pay the taxes on vested shares, 20% penalty tax, and interest on unpaid taxes. This means reputation of your startup could be at stake.

Who does give you 409A report?

There are a lot of firms that specialize in this area and they can give you one for a price in the upward of $2000. When a startup is really starting up and has nothing in place except the sweat of the promoters, does it really spend that kind of amount for getting a valuation report, for granting the options? No. In the following circumstances, the founders can generate their own 409A valuation report:

a) your company has not raised more than 500K,

b) never issued SAFE, or convertible Debt instruments,

c) no consistent revenue,

d) no IPO/acquisition happens in next 180/90 days respectively, or

e) has no assets more than $100K

The IRS doesn’t want you to grant the options the FMV( Fair Market Value), because of the tax implications of the options. Both Incentive Stock Options (ISO) and Non-Qualified Stock Options (NQSO) shall be issued based on FMV, and if the FMV is not set up while granting the ISOs, the ISO’s treated as NQSO and fall under 409A jurisdiction!

So Set up a Stock option plan very early, to avoid expensive and avoidable Valuations!

Apportunity, helps startups from their ideas to apps, to opportunities. The author is the CEO Futran solutions, Inc, the parent company of Apportunity.

(This article is the second in the series of my articles on startups. Please visit my previous piece, Bad Branding…, published on LinkedIn).

The moment we think about successful startups, our minds start breathing in billions. Names like Space X, Airbnb and Uber whiz past the thought dimension. Young and dynamic CEOs such as Travis Kalanick (Uber) and Evan Spiegel (Snap Chat) have already inspired thousands of entrepreneurs to start up on their own. And we can’t thank them enough for that!

But if we were to look at it honestly, don’t these stories of huge success throw a monkey wrench at pettier looking drawing boards? The truth is, not all of us need to have that supremely disruptive idea. And new startups can start with just an ordinary idea and identify a small gap in existing processes or sometimes they can be as ordinary as existing businesses.

Unfortunately, a small business idea is often weighed against the “million dollar startup” fantasy. The comparison is not just unfair, but also easily overwhelming. And before you know it, so many young people drop the idea of a new business.

Branding is the buzz word that spins billions of dollars in spending from the smallest companies to Fortune 500 giants. There are methods and procedures to measure brand-equity, but there is no methodology (yet) to tell whether the branding good, or less, or excessive, or bad. In the following paragraphs, we examine how famous brands went ahead and branded way too much for their own good – giving us some staggering cases of bad branding!

So how rich is Facebook?

Answer: Rich enough to put its founder in line with Microsoft and Amazon founders on the “richest list”.

When Facebook acquired WhatsApp for $19.3 billion in February 2014, many people wondered why! At that time, it became the largest acquisition of a venture-backed enterprise. The real surprise was the fact that WhatsApp was valued at only $1.5 billion just a few months before this acquisition actually happened.

The app development industry is at an all-time high with billions of dollars pouring in and out of the market. Recently, Futran Solutions, Inc., a New Jersey based IT solutions company acquired an India based app development company, Apportunity Futureware.



New Jersey based IT Consulting and Staffing Solutions Company, Futran Solutions, Inc. has recently acquired Apportunity Futureware, an established Indian app development company operating out of Mumbai and Chandigarh. Futran Solutions provides IT services in artificial intelligence, big data sciences, web development, and mobile apps development. The company serves variegated industries like life sciences, insurance, finance, gaming, retail and media and communications.