Cohort 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 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 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 financial analysis used in M&A to determine whether a proposed acquisition will increase (accrete) or decrease (dilute) the acquirer's earnings per share. This analysis is particularly sensitive to how acquired intangible assets are valued and amortised post-transaction.

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.

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.

An assessment of the sustainability, predictability, and growth trajectory of a company's revenue streams, examining factors such as the proportion of recurring versus one-time revenue, customer concentration, contract duration and renewal rates, pricing power, and the distinction between organic and acquisition-driven growth. Revenue quality analysis is a core component of financial due diligence in M&A transactions and directly impacts the selection of appropriate valuation multiples.

A legal assessment that determines whether a product, process, or technology can be commercialised without infringing the intellectual property rights of third parties. FTO analysis involves searching and reviewing granted patents and pending applications in relevant jurisdictions to identify potential infringement risks.

How do you achieve and measure product-market fit?

Product-market fit is achieved when a product satisfies strong market demand — measured by retention rates, organic growth, the Sean Ellis survey (40%+ 'very disappointed'), and customers actively recommending the product.