An equity story is the investment case a company presents to investors at an IPO: why the business is worth owning, how it will grow, why that growth is defensible, and what investors are paying for. The same discipline applies to other equity raises.
For a scale-up, most of what investors are asked to pay for is intangible: the product and its code, data, customer relationships, brand and the know-how of the team. Much of it is not on the balance sheet, so the narrative has to carry it, and every claim in that narrative has to be backed by evidence.
This article covers the mechanics: what an equity story contains, how each claim maps to an asset and its evidence, and how the story stays consistent with the offer document. It uses UK terms (AIM, the Main Market, FRS 102 and UK-adopted IFRS), but the concept applies to a listing on any exchange.
An equity story is not a separate document. It is the argument that runs through every investor-facing part of an initial public offering (IPO): the narrative sections of the admission document (for AIM) or the prospectus (for the Main Market), the analyst presentation, and the roadshow meetings with institutions.
An equity story is the investment case for owning a company's shares. It explains what the business does, how it will grow, why that growth is defensible and what investors are paying for, and it must be consistent across the offer document, the analyst presentation and the roadshow.
The equity story also shapes the price, because the valuation range is set against the case the company makes. Our article on IPO valuation methods explains how that range is built.
Most equity stories cover the same six components. The difference between a strong story and a weak one is less about which components appear than about whether each is tied to something the company can prove.
| Component | What it answers | Intangible assets behind it |
|---|---|---|
| Market and opportunity | How large is the addressable market, and why now? | Market data and insight; brand position |
| Business model and competitive position | How does the company make money, and why does it win? | Proprietary technology; customer relationships; brand |
| Growth strategy | Where will the next stage of growth come from? | Product roadmap; data; distribution relationships |
| Financial profile and KPIs | What do growth, margin and retention look like, and how are they measured? | Customer relationships; proprietary technology; data |
| Management and governance | Who runs the business, and how is it overseen? | Team know-how; management depth; board processes |
| Use of proceeds | What will the new money build? | The assets the investment will create or extend |
Read down the right-hand column and a pattern emerges. Almost every component rests on an asset that a reader of the financial statements cannot see.
Investors in a scale-up are buying future cash flows, and those cash flows come from the assets that produce them: the product, the data, the brand, the team and the customer relationships that turn into recurring revenue. Many of these are internally generated and never appear on the balance sheet.
That leaves a gap between what the accounts show and what the business is worth. The equity story fills it. It names the assets, shows how they produce the numbers in the forecast, and addresses the risks attached to them, such as key person risk or dependence on a small number of customers. Brand equity, for example, only becomes part of the case when the company can point to its effect on acquisition, retention or pricing.
For worked cases from IG Group and PensionBee, see our public listing playbook for intangible assets. The rest of this article deals with how to build and evidence the story itself.
A well-built equity story moves in three layers, each answering a different investor question. The playbook sets out the structure; the mechanics below show what each layer needs to contain.
Growth, margin and retention, each defined once and measured the same way in every period presented. These are the numbers investors model, so their definitions must match the financial information in the offer document.
The specific intangible assets behind each outcome, named precisely: a particular platform, a defined customer base, a dataset the company has the right to use. Generic claims such as "strong technology" give an analyst nothing to test.
The reasons a competitor cannot replicate the assets quickly: ownership and title, switching costs, accumulated data, depth of know-how. Each reason needs evidence, and each dependency (a key person, a concentrated customer) needs to be acknowledged.
Each layer depends on the one below it. An outcome without a named asset is a number with no explanation, and an asset without evidence of defensibility is a claim investors will discount. Build the story from the evidence up, then present it from the outcomes down.
The value bridge is where the equity story becomes testable. It takes each driver in the forecast and links it to the intangible asset that produces it, and then to the evidence for that asset. It is, in effect, a value driver tree with an evidence column added.
| Forecast driver | Intangible asset that produces it | Evidence an analyst will ask for |
|---|---|---|
| Revenue growth | Product and brand | Customer acquisition by channel; product usage trends; brand awareness and organic demand |
| Net revenue retention | Customer relationships | Cohort retention and expansion data; contract terms; revenue by customer |
| Gross margin | Proprietary technology | Cost to serve over time; IP assignments and title; architecture and scaling records |
| Sales efficiency | Data and know-how | Sales cycle and conversion data; documented processes; data sources and rights of use |
Every number in the forecast should trace back through a row like these to documents the company already holds.
An illustrative software scale-up forecasts that existing customers will spend more each year. Its value bridge links that driver to customer relationships, and links customer relationships to cohort data, signed contracts and a revenue-by-customer analysis. When an analyst asks why the expansion assumption is credible, the answer is a set of records, not an assertion.
A register of intangible assets makes the bridge practical. A Value Drivers Register records each asset with its owner and evidence, so the right-hand column of the bridge is assembled from a record the company keeps, not from a search through the data room.
The offer document is verified before it is published: every factual statement in it is checked against supporting evidence. Statements about intangible assets are no exception. If the equity story says the company owns its core technology, has a particular retention profile or holds rights to a dataset, the evidence for each statement has to exist and has to hold up.
Two other workstreams test the same claims. The reporting accountant's work, including the long-form report, looks closely at the business behind the numbers; our article on the long-form report in an IPO explains how intangible assets are examined there. Legal due diligence tests title: whether the company, rather than a founder, employee or contractor, owns the IP the story relies on.
A claim the evidence cannot support does not survive into the published document. It is either removed or rewritten as a risk factor. Discovering this late can mean reshaping the equity story weeks before admission, so test each asset claim against its evidence early.
The practical lesson is to write the equity story and assemble its evidence at the same time. A claim drafted first and evidenced later is the one most likely to come out.
Analysts compare metrics such as EBITDA with those of listed peers, and accounting choices change those metrics. An equity story that does not explain its accounting invites an analyst to make adjustments the company would rather explain itself.
Two choices matter most for intangibles. The first is development spend: whether it is capitalised as an asset or expensed. Capitalised costs are amortised below EBITDA, while expensed costs reduce it directly, so two otherwise similar companies can report different EBITDA. The second is goodwill from past acquisitions, which is amortised under FRS 102 but, under IFRS, is not amortised and is instead tested for impairment.
The choice of framework is therefore part of the equity story, not only a reporting decision. A company listing on AIM under FRS 102 should explain how its reported figures compare with IFRS reporters in its peer group. For the detail, see FRS 102 for AIM companies, and for how comparability feeds into pricing, IPO valuation methods.
Most weaknesses come from a few sources, and each has a straightforward fix if found early.
| Mistake | Fix |
|---|---|
| Presenting technology investment purely as cost | Show what the spend has built and how that asset produces margin or growth; the public listing playbook makes the same point |
| Claims without evidence | Pair every asset claim with the records that support it before the claim is drafted |
| KPIs that change definition between periods | Fix one definition per KPI, apply it to every period presented and reconcile it to the financial information |
| A story inconsistent with the accounts | Reconcile narrative figures to the historical financial information and explain accounting choices |
| Ignoring dependencies such as key people or customer concentration | Acknowledge them, show succession and retention plans, and present revenue by customer |
Dependencies are not weaknesses to hide. Investors and advisers will find them in due diligence, and a story that addresses them openly is more credible than one that leaves them to be discovered.
An equity story is only as strong as the evidence behind it, organised long before the advisers ask for it.
In Opagio Intangibles, the Value Drivers Register links each intangible asset to its evidence, so the assets in the story and the documents behind them sit in one record. The company valuation workspace builds the valuation range, with comparables that you enter. Co-branded reports bring the register and the asset valuations from the Asset Valuator to the board, so the directors see the assets the story rests on as part of their regular reporting. For the wider picture of preparing for an exit, see Opagio for exit readiness, our FAQ on which intangible assets matter most for exit preparation, and how a listing compares with other routes in business exit strategies compared.
The company and its advisers own the equity story. Opagio supports the evidence behind it: the record of assets, their valuations and the links between them.
If a listing is on your horizon, start with the register and the value bridge, so every claim in the equity story has its evidence in place. Book a demo of Opagio Intangibles.
An equity story is the investment case a company presents to investors at an IPO. It explains why the business is worth owning, how it will grow, why that growth is defensible and what investors are paying for. It runs through the offer document, the analyst presentation and the roadshow.
Six components are typical: market and opportunity; business model and competitive position; growth strategy; financial profile and KPIs; management and governance; and use of proceeds. For a scale-up, each should be linked to the intangible assets that underpin it.
Build a value bridge that links each forecast driver to the asset that produces it and to the records that support it, such as IP assignments, cohort retention data and contracts. Because the offer document is verified, each asset claim needs evidence that will hold up to that process and to the reporting accountant's work.
Ivan Gowan is Co-Founder and CEO of Opagio. He spent 15 years at IG Group (LSE: IGG) as part of the senior leadership team and invested in PensionBee's first funding round, working closely with the founders through to their LSE listing. Learn more about our team.
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