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409.ai
Techstars '24Collingwood, CA · Founded 2022 · 6 employees on LinkedIn · 2 known investors
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409.AI prepares expert-reviewed valuation documentation for startups and small businesses, including 409A valuations, QSBS attestation letters, and reports under standards such as ASC 718, ASC 820, IFRS 2, and UK HMRC schemes (EMI/CSOP). It also covers gift and estate tax valuations, purchase price allocation, impairment testing, ESOP, and IP/intangible asset valuations.
Also known as 409.AI · Spruce Software Inc.
Founders & leadership
409.ai was founded in 2022 by Adam Czach.
Investors · 2
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Company profile
researched Sep 2026409.ai (409.AI), a trade name for Spruce Software Inc., provides valuation documentation for startups, small and medium-sized businesses, and private companies. Its core product is the 409A valuation report used to establish common stock fair market value and support stock option strike pricing under Section 409A of the US Internal Revenue Code. Beyond 409A work, the company offers QSBS (Section 1202) attestation letters, ASC 718 and IFRS 2 grant-date fair value reports for share-based compensation expense, ASC 820 fair value reports with Level 3 documentation, ASC 805 purchase price allocation reports, ASC 350/360 goodwill and intangible impairment testing, ESOP valuations supporting trustees and ERISA compliance, gift and estate tax valuations, SMB fair market value reports for loans, buy-sell agreements and ownership changes, IP and intangible asset valuations, and UK HMRC EMI (UMV/AMV, VAL231) and CSOP (VAL230) valuation reports.
The delivery model combines software automation with human review: clients complete an online intake and connect accounting software and cap table data, the platform runs analysis, and valuation experts review and edit the report before delivery. A draft report is produced in roughly 24 hours after intake is complete, with a final expert-reviewed report in seven business days on the standard timeline and one- or three-business-day express options available as add-ons. Reports start at $899 USD with pricing tiered by capital raised; the first two hours of audit support are included, with further audit defence at $175 USD per hour. Caplight classifies the company as a B2B fintech in compliance and risk, accounting and expense, vertical SaaS and workflow automation, serving a services and consulting customer profile.
Founding story
According to an interview with founder and CEO Mike Magnacca, the team's earlier product helped lenders reduce loan due diligence time by up to 90% using AI. Clients began requesting the underlying reports for their own decision making, prompting conversations with more than 25 businesses and industry professionals that surfaced demand for frequent valuations for strategic decisions, compliance and team scaling. The founders focused on 409A valuations specifically because they enable employees and founders to capture financial upside at exit without diluting existing or new investors.
Business model
B2B: 409.ai sells valuation reports and related documentation directly to private companies, priced per report on a tiered basis according to how much capital the client has raised, with paid add-ons for expedited delivery and hourly audit defence beyond the first two included hours. An earlier interview described a founder-friendly option of 12 months of unlimited reports priced below some competitors' single-report cost.
Fees for valuation reports starting at $899 USD, tiered by capital raised, plus express delivery add-ons and audit defence billed at $175 USD per hour after two free hours; a 12-month unlimited-report option was also described.
Traction
The company reported five full-time team members at the time of its January 2024 platform launch and is listed at 1-10 employees by Techstars and at 6 employees by Caplight. Caplight market signals record monthly website visitors rising 38% month over month to 2,900 in June 2025 and a further 51% month-over-month increase noted in June 2026.
Latest developments
As of 2025 the company's site lists a broadened catalogue of thirteen report types beyond 409A, published pricing starting at $899, and a blog covering 409A practice for startups. In the January 2024 interview the company said it planned a fundraise in early 2024 to scale the team and had a partnership pending announcement.
▸Full profile — market position, technology, go-to-market, geography, history
Market position
Caplight lists 409.ai as a private FinTech company and identifies Meld Valuation, Eqvista and Mantle as the closest comparables by similarity; the company is placed in the top 50% of companies Caplight tracks on its momentum index.
The company positions its automated, integration-driven workflow against incumbent providers that bill hourly for consulting time, claiming reports that are roughly ten times faster and 50% cheaper while retaining expert review for IRS-defensible output. It states it will not adjust a valuation without clear supported reason and declines engagements where submitted information appears inaccurate or misleading.
Technology
The platform uses direct API integrations with accounting software to pull roughly 10,000 real-time data points into a machine learning model trained on about 200,000 businesses, topic modeling to capture business information and identify comparable companies and benchmarks, and large language models and generative AI to draft the 30-70 page valuation reports. Valuation experts then review and edit the output. Valuation methodology described by the company includes enterprise value estimation allocated across share classes using an option pricing model backsolve calibrated to the most recent financing, with a discount for lack of marketability applied using Finnerty and Chaffe models, alongside asset-based, income and market approaches depending on company stage.
Go-to-market
Private companies granting stock options or issuing common stock, including pre-revenue and early-stage startups, venture studios and their portfolio companies, later-stage venture-backed companies, and small and medium-sized businesses needing valuations for loans, buy-sell agreements, ownership changes, ESOP administration, estate and gift tax filings, and financial reporting or audit support.
Geography
Listed as based in Toronto, Ontario, Canada. Its report offerings cover US standards (Section 409A, Section 1202 QSBS, ASC 718, ASC 820, ASC 805, ASC 350/360, ERISA/ESOP), international IFRS 2 reporting, and UK HMRC EMI and CSOP schemes.
History
Founded in 2022 and operating as a trade name for Spruce Software Inc., the company first shipped a tool that used AI to cut lender due diligence time on loans, then pivoted toward business valuations after customers asked for access to its reports. It graduated from a Toronto startup accelerator and launched its real-time business valuation platform in January 2024, was listed as a Techstars '24 company, and by 2025 was publishing report products spanning US, IFRS and UK HMRC valuation standards.
Compiled by commissioned research from 8 cited public sources — announcements, filings, and press listed under research sources below.
Key figures
latest reportedCompany-reported or press-reported figures, each dated to when it was claimed — not independently audited.
Related companies · 7
Companies working in the same space as 409.ai.
Timeline · 2
launches, deals, and filings409.AI launched its real-time business valuation product after initial traction and graduating from a Toronto startup accelerator, per an interview with founder and CEO Mike Magnacca.
409.ai is listed on the Techstars job board as a Techstars '24 company based in Toronto, Ontario, and noted as a trade name for Spruce Software Inc.
Dated company events from announcements, filings, and press; legal rows summarize public dockets and regulator releases.
In the news
▸Research sources · 8
primary sources listed
- 409.ai409.ai · web
8 public sources were cited for this profile; the first-party ones are listed here.
Frequently asked questions
- What does 409.ai do?
- 409.ai is a Toronto-based fintech that uses AI plus expert review to produce 409A and other private-company valuation reports.
- Who founded 409.ai?
- 409.ai was founded by Adam Czach in 2022.
- Who are 409.ai's investors?
- 409.ai's investors include Techstars, YorkU (YSpace).
- Where is 409.ai headquartered?
- 409.ai is headquartered in Collingwood, CA.