Gross Value Added (GVA)

A hierarchical diagram that breaks down a company's enterprise value into its component financial and operational drivers, mapping how inputs such as customer acquisition, pricing, retention, and productivity combine to produce revenue, profit, and cash flow. Value driver trees are essential for identifying where intangible asset investments create the greatest impact.

A valuation multiple calculated by dividing enterprise value by revenue, used to value businesses where profitability is not yet meaningful — such as early-stage companies, high-growth SaaS businesses, and pre-profit biotech firms. EV/Revenue is less susceptible to manipulation through accounting choices than earnings-based multiples but provides less insight into operating efficiency.

The total monetary value of all finished goods and services produced within a country during a specific time period. GDP is the broadest measure of national economic output and is widely used as a proxy for overall economic health.

A measure of productivity that accounts for the contributions of multiple inputs — including labour, capital, energy, and materials — to output growth. MFP captures the efficiency with which all inputs are combined and is closely related to total factor productivity, serving as a key indicator of innovation and intangible capital contributions.

The ratio of total purchased inputs (services, energy, and materials) to revenue, expressed as a percentage. Purchases intensity measures how dependent a business is on external inputs and how efficiently it converts purchased resources into value.

A measure of output that accounts for changes in the quality of goods and services produced, rather than simply measuring volume. Quality adjustment is essential for accurate productivity measurement, particularly in sectors where intangible investments drive improvements in product functionality, reliability, and user experience.

A measure of productivity that captures the effects of technology, innovation, management quality, and other intangible factors that increase output beyond what can be explained by the quantity of labour and capital inputs used. TFP is calculated as GVA divided by a weighted combination of labour and capital inputs.

Legally registered signs, symbols, words, or combinations that identify and distinguish the goods or services of one company from those of others. Trademarks protect brand identity and are renewable indefinitely, making them potentially perpetual intangible assets.

What is Customer Lifetime Value (LTV)?

LTV is the total profit a company expects to generate from a customer relationship over its lifetime — calculated as (ARPU × Contribution Margin) / Monthly Churn.

What is Gross Margin and Contribution Margin?

Gross Margin = (Revenue − Cost of Goods Sold) / Revenue. Contribution Margin = (Revenue − Variable Costs) / Revenue. Both measure profitability at different levels of cost allocation.

What key metrics do Series A investors evaluate before investing?

Series A investors focus on monthly recurring revenue (typically £50-200K+), revenue growth rate (15-20% month-on-month), unit economics (LTV:CAC > 3:1), retention rates, and evidence of product-market fit.

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.