Cohort Retention Analysis

A forecasting and valuation technique based on the logistic growth function, which models the adoption or diffusion of technology, products, or innovations as a characteristic S-shaped curve with slow initial growth, rapid acceleration, and eventual saturation. S-curve analysis is used in intangible asset valuation to project revenue trajectories for technology assets, assess the remaining useful life of patents, and evaluate where a product sits in its lifecycle.

The percentage of customers (measured by count, not revenue) that remain active over a given period, regardless of changes in their contract value. Logo retention — also called customer retention rate or gross retention by customer count — isolates the frequency of customer loss from revenue expansion or contraction and is a key indicator of product-market fit and customer satisfaction.

The percentage of recurring revenue retained from existing customers over a period, excluding any expansion revenue. GRR isolates the impact of churn and contraction and can never exceed 100%.

The percentage of recurring revenue retained from existing customers over a period, including expansion revenue from upsells and cross-sells. NRR above 100% indicates that growth from existing customers outpaces losses from churn, a hallmark of strong product-market fit.

The valuation of a company's existing order book or contracted but undelivered revenue at the measurement date. Backlog is recognised as a contract-based intangible asset under IFRS 3 and ASC 805 when it arises from contractual or legal rights.

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.

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.

An economic model in which businesses generate recurring revenue by providing ongoing access to products or services rather than one-time sales. The subscription economy elevates the importance of intangible assets such as customer relationships, brand trust, and product stickiness, which together determine retention and lifetime value.

SaaS Intangible Assets: ARR, Churn, and Customer Value

SaaS businesses generate value through intangible assets that compound over time — customer relationships measured by ARR and retention, technology platforms that scale without proportional cost, and data assets that improve with usage. Understanding the intangible asset composition of a SaaS business changes how you value it.

What is Net Revenue Retention (NRR)?

NRR measures the revenue retained from a cohort of customers plus expansion revenue (upsells, cross-sells) minus churn, expressing it as a percentage of starting revenue.

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.

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.