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Startup Valuation: The Ultimate Guide

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with Section 409A) require companies to establish the Fair Market Value (FMV) of their common stock through a formal valuation process. [6] It’s crucial for tax compliance and ensuring options have real economic value. a 409A valuation for tax compliance [14] ) cannot be directly substituted for another (e.g.,

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Startup Valuation: The Ultimate Guide for Founders

Equidam

11] [13] Internal/Compliance (e.g., 409A, ESOP): Startups also encounter valuations for compliance purposes, most notably the 409A valuation in the US or similar valuations for Employee Stock Option Plans (ESOPs) elsewhere. [10] 11] [13] Internal/Compliance (e.g., This premium rises when perceived market risk increases. [27]