Is It Time for VCs (and Their Auditors) to Revisit IPEV Compliance?

For years, the question of IPEV compliance has hovered in the background of Venture Capital valuations: acknowledged, respected, but often bypassed.

Not ignored. Not rejected. Just… challenging.

And understandably so.

Historically, becoming truly IPEV compliant wasn’t easy:

• It was very expensive to outsource

• The concepts were hard to follow and inconsistently explained

• The calculations were complex and timeconsuming

• Cap tables had to be perfectly accurate (still true!)

• Methodology selection and inputs required deep technical judgment

• And perhaps most importantly, there was little pressure from LPs, auditors, or other ecosystem stakeholders to do more than what was “good enough”

Given that backdrop, it’s no surprise that many funds defaulted to:

• Last price paid

• Or CVM (Enterprise Value → Waterfall) …for almost everything.

This wasn’t about cutting corners. It was about practicality.

But things have changed

Quietly. but meaningfully - the environment has shifted.

• Technology has improved dramatically

• IPEV has released updated and clearer guidelines

• Costs have come down significantly

• Expectations are better articulated and easier to operationalize

• And best practices are no longer locked away in specialist valuation teams

(If you’ve read my other blogs, you’ll know we’re finally seeing clarity replace confusion 🙂)

Compliance is no longer an aspiration - it’s achievable

Being IPEV compliant today does not mean reinventing the wheel or adding unnecessary complexity. It means using the right methodology for the right situation, including:

• OPM when uncertainty and optionality dominate

• PWERM when outcomes and milestones can be clearly articulated

• CVM when it genuinely reflects the facts

And critically:

• Baking in milestones

• Applying calibration thoughtfully

• Documenting governance and judgment transparently

This is no longer “the hard way.” It’s simply the correct way and now, the practical way.

Why this matters (now)

This isn’t about:

• Looking backward

• Blaming past practices

• Criticising funds, auditors, or advisors

Quite the opposite.

This is about recognizing that best practices, governance, and compliance should be standards that every serious business professional aspires to including venture capitalists and their auditors.

IPEV compliance is no longer an academic exercise or a luxury reserved for latestage funds. It’s becoming a marker of:

• Professionalism

• Maturity

• And trustworthiness in private markets

A simple question to consider

So here’s the real question for VCs and their auditors:

If IPEV compliance is now clearer, cheaper, more practical, and better supported by both guidance and technology - why wouldn’t it be part of your standard operating model going forward?

Not because you have to. But because today, you genuinely can.

And that feels like progress. ✅