409A · Pulley Shutdown

Leaving Pulley: What Happens to Your 409A

FairValueX · Published 3 November 2026 · 5 min read

Pulley has told customers it will cease all operations and services on 8 December 2026. Pulley has an exclusive arrangement with Carta, under which existing customers may qualify for an assisted migration. For customers taking that route, Pulley's FAQ sets 30 November as the date to opt in to sharing their details with Carta; for a customer who has not opted in by then, Pulley offers no assurance on timing, pricing or disruption to service. If your company used Pulley for its cap table or its 409A valuations, does any of this change the position of the options you have already granted?

For most companies, no. The work is in the records. The one-page records checklist (PDF) lists them.

Your existing 409A does not expire because the vendor does

A 409A valuation matters because of what it lets the company show. Under the Treasury regulations, a value set by a qualifying independent appraisal is presumed reasonable when the valuation date is no more than 12 months before the grant. Separately, a previously calculated value stops being reasonable once its valuation date is more than 12 months before the grant, or if it fails to reflect later information that may materially affect value. Neither test depends on whether the vendor that delivered the report is still in business. For companies that move to Carta, Pulley's FAQ says Carta can accept an existing Pulley 409A as-is, provided the company supplies a copy.

For options already granted, what matters is whether the valuation supported the exercise price on each grant date, and Pulley's closing does not change that. For new grants, the same valuation can be used only within those two limits. What you lose when a vendor closes is access: to the report, the data behind it, and the people who can answer questions about it.

Who will ask for those records, and when

Three readers may need your valuation history:

• Your auditor. Under ASC 718, stock-based compensation expense is measured using the fair value of the award at the grant date, and for a private company the value of the common stock is a key input. If your financial statements are audited, the auditor is likely to ask which valuation supported each grant and to read that report.
• Your next investor's counsel. Diligence requests often ask for the 409A reports behind grants made since the last financing.
• A future acquirer. Buyer diligence covers how past equity grants were priced, and the answer sits in the valuation file.

None of these readers is likely to accept "the vendor closed" as an answer. Each of them expects the company to hold its own file.

What to download

For every valuation Pulley delivered, keep:

1. The final report (PDF), including the valuation date and the name and credentials of the appraiser who signed.
2. The engagement letter or order confirmation showing who performed the work.
3. The inputs you submitted: the cap table as of the valuation date, the financial statements, the forecast and any term sheets.
4. The valuation model or allocation workbook, if the provider will release it.
5. The board consent that approved each grant, stating the exercise price and the valuation relied on.
6. The grant agreements for each option issued against that valuation.
7. Any ASC 718 expense reports Pulley produced for you.

Whichever route you take, download each 409A report yourself and keep your own copy. Work to 30 November; Pulley closes 8 December.

File them by grant. For each grant date, the file should show the valuation relied on, its date and what changed between the two. That is the question each of the three readers above is likely to ask.

When you do need a new 409A

Changing cap-table software should not affect the value of your common stock, so on its own it does not call for a new valuation. A new one is needed before any grant made more than 12 months after the most recent valuation date. It is usually needed when:

• you have signed a term sheet, closed a priced round or completed a secondary sale;
• revenue, the forecast or the business plan has changed materially since the valuation date; or
• an acquisition, a significant customer loss or another material event has occurred.

A practical test: write down the valuation date, the date of any material event and the planned grant date. If a material event falls between the valuation date and the grant date, the valuation may not support the grant. Our article on 409A triggering events covers this in more detail.

Choosing what comes next

Where the cap table goes and who does your next 409A are separate choices, and they need not be the same company. The right answer depends on the complexity of your cap table and on who will read the report. If you migrate to Carta, Pulley's FAQ says Carta will support the defense of Pulley's prior 409A work and that, once your current 409A expires, Carta's 409A team will act as the provider. Whichever you choose, the questions worth asking are the same:

• Who signs the report, and what are their credentials?
• How does the provider set the delivery timeline, and what does it need from you before work starts?
• Will the report explain the method and the key assumptions clearly enough for your auditor to follow without a call?
• What happens if your auditor asks questions after delivery?

Your Pulley-era valuations remain what they were. Download every report, pair it with the board consent it supported, and plan the next valuation around your next grant.

This article is general information, not tax or legal advice. Sources: Treas. Reg. §1.409A-1(b)(5)(i)(A)(1), (b)(5)(iv)(B)(1) and (B)(2)(i); FASB ASC 718; Pulley, "FAQ: What is happening with Pulley's shutdown" (15 Sep 2026), https://pulley2025.pulley.com/guides/faq-what-is-happening-with-pulleys-shutdown; Pulley, shutdown notice on pulley.com (viewed 20 October 2026). Pulley's dates can move: check its notice before relying on them.