The National Venture Capital Association (NVCA) board of directors has unanimously endorsed the International Private Equity and Venture Capital (IPEV) valuation guidelines at its board meeting on 13 May 2013.
These guidelines, developed by US and international industry participants, were written for practitioner use in developing and implementing valuation reporting processes and were finalised by the IPEV board in December 2012.
“The IPEV Valuation Guidelines are the result of industry stakeholders across a number of countries coming together to develop appropriate valuation guidance for venture capital, growth capital, and private equity firms,” says Mark Heesen (pictured), president of NVCA. “These guidelines are consistent with US GAAP which specifies that fair value be determined using market participant assumptions. The collaborative process that took place reflects a strong understanding of the nascent companies in which our industry invests.”
Three members of the NVCA CFO Task Force served on the IPEV Committee: William Hupp of Adams Street Partners (vice chair of IPEV), Mike Maher of US Venture Partners and Stephen Holmes of InterWest Partners. In addition, veteran industry valuation expert David Larsen of financial advisory and investment banking firm Duff & Phelps was heavily involved in the drafting.
By endorsing these guidelines, NVCA joins the US Private Equity and Growth Capital (PEGCC) Association, and many venture capital, private equity, and limited partner associations in North America, Europe, Asia, Africa, and Australia.
The NVCA resolution, which passed unanimously, reads:
“NVCA endorses the updated IPEV Valuation Guidelines released by the IPEV board in December 2012 and applauds the work of international and US GPs and LPs in creating this guidance. We will promote IPEV Valuation Guidelines to our members and encourage our members to use this document in establishing their own processes and procedures in consultation with their LPs.”
