How do intangible assets affect company valuation?
Short Answer
Intangible assets typically represent 70-90% of enterprise value in modern companies, directly influencing revenue multiples, EBITDA margins, and acquisition premiums.
Full Explanation
In most industries, intangible assets now drive the majority of enterprise value. S&P 500 companies have seen intangible asset value grow from 17% of market capitalisation in 1975 to over 90% today. Strong intangible portfolios — particularly brand equity, proprietary technology, and deep customer relationships — command higher revenue multiples and justify premium valuations in M&A transactions. Companies with well-documented intangible assets typically achieve 20-40% higher deal premiums because acquirers can quantify the strategic value they are buying. Conversely, companies that fail to identify and articulate their intangible assets often leave value on the table during fundraising or exit negotiations. Opagio helps companies quantify this value gap and build the evidence base needed to justify their true worth.
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