Even if they raised a convertible note or pure debt (which is atypical of a First Round Capital led round), it is unlikely that their 409A led to an extremely low FMV. Even a company that raises $2M in debt at a $6M cap would likely have a common share valuation over $500K.<p>Source: I&#x27;m a previous founder of a startup that raised a $1.5M convertible note and have done a 409A valuation based on it.