Codon Valuation

Estimate 409A common stock value

estimate_409a_value

Read-onlyIdempotent

Gives an indicative range for the fair market value per share of a US private company's common stock, as a planning estimate before a formal 409A valuation (for example, to anticipate an option strike price). Uses an option pricing model backsolve when there is a priced round in the last 12 months; otherwise a rolled-forward round, a sector revenue multiple, or an asset-based approach, depending on the inputs. Applies Finnerty and Chaffe marketability discounts. Inputs are numbers from the cap table and financials; no company or personal names are needed. Limitations: treats all preferred as non-participating and pari passu with 1:1 conversion, and does not model SAFEs or convertible notes. The result is not a 409A valuation.

Tool call template

Replace each placeholder with a value matching the input schema. Only required parameters are included; add optional parameters as needed.

{
  "id": 1,
  "jsonrpc": "2.0",
  "method": "tools/call",
  "params": {
    "arguments": {
      "common_shares_outstanding": "<common_shares_outstanding>"
    },
    "name": "estimate_409a_value"
  }
}

Input Schema

Name	Required	Description
`cash`	No	Cash on hand, in US dollars.
`debt`	No	Interest-bearing debt, in US dollars.
`sector`	No	Company sector. Sets the default volatility and revenue multiple. Use 'other' if unsure.
`years_to_exit`	No	Expected years until a sale or IPO. Defaults to 3.
`volatility_pct`	No	Optional override for equity volatility, as a percentage.
`gross_margin_pct`	No	Gross margin, as a percentage.
`preferred_series`	No	Each priced preferred share round. Leave empty or omit if the company has never raised a priced round.
`revenue_growth_pct`	No	Year-over-year revenue growth, as a percentage (for example 40 for 40%).
`risk_free_rate_pct`	No	Optional current government bond yield matching years_to_exit, as a percentage.
`options_outstanding`	No	Number of share options granted and outstanding.
`revenue_last_12_months`	No	Revenue for the last 12 months, in US dollars.
`total_capital_invested`	No	Total equity capital invested to date, in US dollars. Used when there is no priced round and no revenue.
`common_shares_outstanding`	Yes	Number of common shares issued and outstanding (excluding options and preferred).
`has_participating_preferred`	No	True if any preferred series is participating.
`performance_since_last_round`	No	How the company has performed against plan since its last priced round. Used when that round is more than 12 months old.
`has_unconverted_safes_or_notes`	No	True if the company has SAFEs or convertible notes that have not yet converted.
`options_weighted_average_strike`	No	Weighted average exercise price of outstanding options, in US dollars.

Schema Changelog

Changes observed during successful MCP inspections.

First observedOct 12, 2026

TDQS

A4.4/5.0

Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

The description adds substantial behavioral detail beyond the read-only, idempotent annotations: it explains the option-pricing backsolve versus rolled-forward round, revenue multiple, and asset-based approaches; names the Finnerty and Chaffe discounts; discloses input privacy; and states key modeling limitations. There is no contradiction with annotations.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness4/5

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is front-loaded with purpose and then moves through method, inputs, limitations, and disclaimer. It is dense but appropriately sized for a complex 17-parameter valuation model, with no clearly wasteful sentences.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Given the tool's complexity, 100% schema coverage, and safe read-only annotations, the description is complete. It covers methodology, assumptions, input nature, privacy, and limitations, and it summarizes the return as an indicative per-share range despite there being no output schema.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters3/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema description coverage is 100%, so each of the 17 parameters is already well documented. The description adds model-selection context that connects inputs to methods, but it does not provide per-parameter meaning beyond what the schema already supplies, making the baseline 3 appropriate.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description states a specific verb and resource: it estimates fair market value per share of US private company common stock as a planning estimate before a formal 409A valuation. It also clearly distinguishes the output from a formal 409A valuation, which is the primary alternative an agent may consider.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines4/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

It gives clear usage context: use it as a pre-formal planning estimate, for example to anticipate an option strike price. It also states important when-not-to-use limitations around SAFEs, convertible notes, and formal valuation status, but does not explicitly name the sibling tools or route to them.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

All Codon Valuation tools Inspect

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