Calibration

Calibration is the bridge between a single observed price and an ongoing fair value. You start by aligning the model to a known anchor, usually the price of a recent round, so that on day one it reproduces that price. In each later period you ask whether the inputs that justified it have changed: operating performance, the competitive position, and macro factors such as interest rates and capital availability.

In practice calibration adjusts a base multiple for the specific differences between a company and its peer group. A company that grows faster than its peers but burns more capital and sits in an illiquid market warrants an explicit set of plus and minus adjustments rather than the raw peer multiple.

The IPEV 2025 guidelines treat calibration as standard practice. DealMatrix applies the same logic at scale, recalibrating every multiple to current market data each quarter. See IPEV 2025, Fair Value and Calibration and Comparable Company Analysis.