The 409a sets the FMV. That's the whole point of getting it done. So the logic is circular. Yes, any options issued with a strike price at FMV are "by definiti

The 409a sets the FMV. That's the whole point of getting it done. So the logic is circular. Yes, any options issued with a strike price at FMV are "by definition" not in the money at time of issuance. But I can tell you from multiple experiences soliciting 409a valuations that the FMV of common is incredibly debatable, and is often essentially just negotiated between the founders/board and the valuation firm to be as low as possible (for the benefit of employee exercise). The valuation firms are absolutely not always taking all differences between classes of shares into account. My comment was hoping maybe this paper would provide a method that we can all agree should be used for valuation of common stock.