Ok, no one has given a good answer to this yet. The “internal valuation” is a 409a valuation and the primary use case is for the tax basis for options granted within 12 months of the grant date. Stripe gives double trigger RSUs so this won’t directly impact the large majority of employees getting RSUs, but they may choose to offer more equity for refreshers or new hire grants, this has little/nothing to do directly with 409a. 409a also is not used by investors to value shares, it has nothing to do with “mark to market” pricing of funds who own stripe equity communicating the value of their investment to LPs in the fund. There are 3 ways to calculate a 409a valuation, specified directly by the IRS, they’re all a very naive way to value companies, and once again the whole point is to have a tax basis for options grants. 409a vals are nearly always below the latest private financing valuation and it is generally in the employees interest to keep the 409a as low as possible for as long as possible to keep the tax basis as low for exercising options. The strike price in options directly comes from the 409a valuation, the basic idea is that (strike price) * (total number of outstanding shares) = 409a valuation. If you do this, the options the company gives you have no value according to the IRS so they are not counted as income. Thanks for coming to my TED talk.
