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General VC Questions

Do cost and fair market value ever differ?

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Dec 05, 2023
Question edited slightly for clarity. 
1 answer
Accepted Answer
Dec 06, 2023
Yes - cost and fair market value can differ. Cost in this context refers to the amount initially paid for an investment, while fair market value (commonly referred to as FMV) is the current market value of that investment. Changes in market conditions, performance of the investment, financings, and other factors can cause the fair market value to be higher or lower than the initial cost paid. 

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