Calibration (Valuation)
Definition
The IPEV discipline that gives a Fair Value model its memory. Entry inputs (the most recent funding round price, comparable transactions, noted multiples, identified intangible assets) become reference points; deltas are tracked at every measurement date. The 2025 IPEV update tightened calibration to require per-period reassessment, with documented evidence of how the inputs have moved between marks. For founders, calibration is what turns 'we raised at £30M last year' into 'and here is exactly what changed in our number, against what evidence, at every quarter since.' Without calibration, every quarterly mark feels arbitrary; with it, the offer at the next round has a defended path back to the last. Builds on five tracked inputs — market multiples drift, comparable transactions, internal performance vs plan, cap-table movements, and intangible-asset additions or impairments — each requiring documented evidence to a standard the Valuer can defend at the IC.
Complementary Terms
Concepts that frequently appear alongside Calibration (Valuation) in practice.
The International Private Equity and Venture Capital Valuation Guidelines (IPEV) are the global standard PE and VC funds use to determine Fair Value of unlisted investments. Issued by the IPEV Board, the guidelines set out how a fund's Valuer documents and defends each portfolio company's Fair Value at every measurement date — typically quarterly.
The date at which Fair Value is determined under IFRS 13, ASC 820, and IPEV Valuation Guidelines. For PE and VC funds, the measurement date is typically the end of each calendar quarter, with formal Fair Value reporting to LPs within 45–60 days.
A founder-side preparation discipline that builds the evidence base a Fund's Fair Value process needs at every measurement date — before the term sheet conversation begins. Distinct from valuation negotiation: a Fair Value defence isn't about arguing for a higher number, it's about producing the inputs the Fund's quarterly Fair Value model will consume for the duration of the investment.
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