Accretion/Dilution Analysis

A method of tracking the behaviour of groups of customers (cohorts) who share a common characteristic — typically their acquisition date — over time. Cohort retention analysis reveals whether product improvements are genuinely improving customer retention by isolating the performance of each intake group, and is essential for forecasting lifetime value and revenue trajectory in subscription businesses.

A method of segmenting customers into groups based on shared characteristics or time of acquisition, then tracking their behaviour and value over time. Cohort analysis is essential for understanding customer lifetime value trends, retention dynamics, and the true unit economics of growth-stage businesses.

A valuation and risk assessment technique that evaluates potential outcomes by modelling different sets of assumptions about key variables such as growth rates, margins, and discount rates. Scenario analysis is essential for intangible asset valuation because the future cash flows attributable to intangible assets are inherently uncertain.

A valuation methodology that estimates a company's value by comparing it to similar publicly traded companies using financial ratios such as EV/Revenue or EV/EBITDA. Comps provide a market-based reference point but may undervalue intangible-heavy businesses if peers are not well matched.

A productivity measurement technique that compares a firm's or sector's performance against the theoretical maximum output achievable with given inputs. Frontier analysis methods, including data envelopment analysis and stochastic frontier analysis, reveal inefficiencies and quantify the productivity gap attributable to underinvestment in intangible assets.

A valuation technique that applies financial options pricing theory to evaluate the flexibility embedded in strategic investments, such as the option to expand, delay, or abandon a project. Real options analysis is particularly valuable for intangible-intensive investments where uncertainty is high and future decision points create significant embedded value.

A method of testing how changes in individual assumptions — such as discount rate, growth rate, or royalty rate — affect the estimated value of an asset or business. Sensitivity analysis is a critical component of intangible asset valuation, revealing which inputs have the greatest impact on the result and informing risk assessment.

A valuation methodology that estimates a company's value by analysing the prices paid in comparable M&A transactions. Precedent transactions incorporate control premiums and strategic value that may not be captured in public market comparables.

How does equity dilution work across funding rounds?

Equity dilution occurs when new shares are issued in a funding round, reducing existing shareholders' ownership percentages — though not necessarily the value of their holdings if the company's valuation increases.