Startup America Suggestion of the Day: Repeal Section 409A (Installment 5)


Many of us here in startup land are hoping that the President’s Startup America Initiative is for real. For me, success means that the initiative will meaningfully simplify the legal and regulatory landscape in which startups operate.

I even have hopes that somehow the government will make it easier for companies to go public.

There are many reasons to be positive.

I have been writing about the suggestions I have for the Startup America Team pretty much daily. In response to Bill Carleton’s question on, I put together a list of 14 specific ideas that I think if implemented would substantially improve life for startups.

If you want to see my quora post on these items, see here.

Many of my ideas are simple and essentially amount to: repeal bad law.

My suggestion for today–repeal Internal Revenue Code Section 409A (at least as it applies to equity grants of startup companies).

If you are not familiar, Section 409A requires startups to issue stock options at fair market value, and the regulatory guidance pushes many companies toward obtaining expensive third party appraisals.

Please see full article below for more information and links.

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