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. Under paragraph 2.6 of the IPEV Guidelines, where the entry price is fair value the techniques to be used later are calibrated to it, then rerun with current market inputs at each measurement date; the Guidelines state that calibration is required by accounting standards (as the 2022 edition already did), and the December 2025 edition expanded the explanation and added guidance on calibrating to later orderly rounds. 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 Guidelines) are best-practice recommendations, published by the IPEV Board, for measuring the Fair Value of private equity and venture capital investments consistently with IFRS 13 and ASC 820. They apply at investment level: a fund's Valuer uses them to value the fund's holding in each portfolio company at every measurement date — typically quarterly — with one or more of five techniques (multiples, industry valuation benchmarks, available market prices, discounted cash flows and net assets), calibrated to the price of a recent orderly investment.
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.
Normalised EBITDA (often used interchangeably with adjusted EBITDA, though adjusted EBITDA usually means a company's own measure of what it excludes) is a company's earnings before interest, tax, depreciation and amortisation, restated to show the sustainable earning power a buyer would inherit. The reported figure is adjusted to remove one-off items, owner-specific costs and non-market arrangements — an owner's salary above or below the market rate, personal expenses run through the business, exceptional legal costs, or the effect of a related-party contract — and to add back or strip out anything that will not recur under new ownership.
The documented record that establishes an intangible asset exists, where it sits in the Opagio 12 framework, what it is worth, and how that value can be defended at a measurement date. Evidence comes in four forms: identification (the asset is named and classified), provenance (the source documents are attached), measurement (a valuation method has been applied with documented inputs), and persistence (the evidence is reviewed and updated on a defined cadence).
The IPEV evidence standard, set out in the commentary under paragraph 2.5 of the Guidelines: information that is known or knowable as of the measurement date is in scope at every quarterly Fair Value remark, whether the founder surfaced it or not. The Guidelines define it as facts, conditions or observable information that exist at the measurement date and are available to the valuer, or would reasonably be available through routine inquiry or due diligence; information that becomes known, or events that occur, after the measurement date are subsequent events and are not known or knowable at that date.
A reconciliation document that maps founder-reported EBITDA to a Fund's maintainable EBITDA, identifying each adjustment per IPEV Section 3.4 with documented evidence. The bridge typically traces non-recurring spend, discontinued lines, one-time items, founder compensation normalisation, and pro-forma adjustments — each with source documentation (board minutes, contracts, payroll) and the known-and-knowable evidence flag.
The Opagio attestation that an asset, company, or practitioner meets a defined evidence-quality standard. Modelled on the hallmark on silver: the hallmark certifies that the metal has been tested by an independent assay office and meets a defined standard of purity — it does not certify that the silver is valuable, or that any particular price should be paid for it.
Related FAQ
What is the Scorecard Method for startup valuation?
The Scorecard Method values pre-revenue startups by comparing them to similar funded companies in the region, then adjusting the median valuation based on the startup's relative strength across key factors.
Read full answer →How does the market approach work for intangible asset valuation?
The market approach values intangible assets using pricing data from comparable arm's-length transactions involving similar assets, applying observed multiples or royalty rates.
Read full answer →What is my business worth to a buyer?
A buyer applies a multiple to your normalised earnings and sets that multiple on the quality of your intangible assets — brand, customers, technology, processes and people — not on last year's profit alone.
Read full answer →Put this knowledge to work
Use Opagio's free tools to measure and grow the intangible assets that drive your business value.