IPEV Valuation Guidelines

The US GAAP standard that defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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.

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 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 financing instrument developed by Y Combinator that provides investors with the right to receive equity at a future priced round, subject to a valuation cap and/or discount. SAFEs are simpler than convertible notes, carry no interest, and have no maturity 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 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 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.

IPEV Guidelines 2025: What Changed and How Funds Apply Them

The IPEV guidelines explained: the five investment-level techniques, calibration and backtesting, and each change in the December 2025 edition, sourced to the edition itself.

Flat, Up or Down: Bridge Valuation Mechanics

How are intangible assets treated in insolvency and restructuring?

In insolvency, intangible assets are realised at forced-sale values (typically 10-40% of going-concern fair value), with IP, brands, and customer lists potentially sold separately to maximise creditor recovery.

What is a cram down and why are they used in distressed financings?

A cram down forces existing shareholders to accept new investment terms (often at a punitive valuation) to fund operations, used when a company is out of capital and has few alternatives.

What is the difference between standard and non-standard VC terms?

Standard terms are market-consensus provisions (weighted-average anti-dilution, protective provisions on major events, 1x liquidation pref); non-standard terms are outliers (full ratchet, excessive pref, veto rights over hiring).