Financial considerations that entrepreneurs face frequently significantly influence the future of their businesses. Cost Basis and Fair Market Value (FMV) are the most important measures to make these judgments.

In order to successfully navigate valuation, taxes, and strategic planning, founders must have a deep understanding of the subtle distinction between these metrics. The supply and demand for a security or asset at any given moment determines the role of FMV in business. On the other hand, the role of cost basis in business is to indicate the first amount you pay for a security or asset.

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