[jalonso510]

Couple of things that are not correct in the article:

(1) a $50,000 fee for a valuation is crazy- early stage companies pay less than 1/10th that.

(2) companies typically do not get a valuation done more than once per year. the article makes it sound like you get a new one every time you issue options, they actually have a shelf life of one-year, unless there is a new financing or other event that requires a new report to be obtained.

Not saying its a good system (it's not), just odd that the NYT would get some basic facts wrong.

[snarf]

The funny thing is that the author of this article is a former (longtime) investment banker. I found the line where he describes the lack of liquidity in private shares "falls especially hard on early investors who are not company employees, those so-called 'series A' or 'series B' venture-capital investors" especially amusing. As if we are supposed to feel more sorry for VCs who are diversified in many investments than employees who aren't.

[jeronpaul]

I completely agree with this. 1) I have never seen a startup pay anything close to that. 2) you are so right--you generally only need 1 every 12 months (at most!). There are some exceptions but they are rare. Some valuation providers sell 409As as if you need them monthly or something. That is absurd.

[gkop]

Thanks for calling out these major factual errors. I can confirm your corrections. What a terrible article!

[df3]

I would imagine that it could also be bundled in with the other legal and tax services a growing startup requires?