When do I need a 409A valuation?
Before your first stock option grant. After that, every 12 months or whenever a material event happens, whichever comes first.
The first one
You need a current 409A before you issue your first stock options, and that holds at pre-seed. There is no company size or funding stage below which it stops applying. If you are granting options, you need a value to grant against.
The 12-month clock
A valuation stays good for 12 months. Miss the refresh and any grants you make after it lapses are priced off a stale number.
Material events
A material event ends the 12 months early. The usual ones:
Closing a priced round
Signing a term sheet
A significant change in revenue
A major customer win or loss
Approaching an IPO, merger, or acquisition
A signed term sheet is the one founders miss. Many practitioners treat it as material, which means a fresh valuation once the round closes rather than riding the old one out to 12 months.