Market Approach Adjustments

The total revenue opportunity available for a product or service if it achieved 100% market share. TAM represents the theoretical maximum market size and is used by investors to assess the scale of opportunity and the potential ceiling for a company's growth.

A market approach valuation technique that estimates the value of a subject company by reference to the prices paid in actual acquisitions of comparable businesses. The method involves identifying relevant transactions, extracting implied valuation multiples, adjusting for differences in timing, deal structure, and synergy expectations, and applying the adjusted multiples to the subject company.

A marketplace where existing shareholders in private companies — typically employees, early investors, or founders — can sell their ownership stakes to new buyers before an IPO or trade sale. Secondary markets for private shares have grown significantly, with platforms such as Forge Global and Nasdaq Private Market facilitating transactions that provide liquidity and price discovery for otherwise illiquid private company equity.

The portion of the total addressable market that a company can realistically serve given its current product, business model, and geographic reach. SAM is a more practical measure of near-term opportunity than TAM.

A market approach valuation technique that estimates the value of a subject company by reference to the trading multiples of publicly listed companies with similar business characteristics. The method involves identifying comparable public companies, selecting appropriate valuation multiples (such as EV/EBITDA or P/E), making adjustments for differences in size, growth, risk, and marketability, and applying the adjusted multiples to the subject company's financial metrics.

A valuation methodology that estimates the value of an asset based on the present value of expected future economic benefits, such as cash flows, earnings, or cost savings. The income approach is the most widely used method for valuing intangible assets and includes techniques such as the relief-from-royalty and multi-period excess earnings methods.

The process of modifying an observed equity beta to better reflect the risk characteristics of the subject company being valued. Common adjustments include unlevering betas from comparable public companies to remove the effect of different capital structures, relevering to the subject company's target capital structure, and applying the Blume or Vasicek adjustment to account for beta's tendency to regress toward 1.0 over time.

A biological medicine that is highly similar to an already approved reference biological product, with no clinically meaningful differences in safety, purity, or potency. Unlike generic small-molecule drugs, biosimilars cannot be exact copies due to the complexity of biological manufacturing processes and require their own clinical trials to demonstrate similarity.

What valuation methods does Opagio Intangibles support?

Opagio supports seven valuation methods: Relief from Royalty, MPEEM, With-and-Without, Replacement Cost, Cost Approach, Greenfield and Market Approach. You choose the method, and the tool marks a recommended one for each asset type.

Can artificial intelligence systems be valued as intangible assets?

Yes. AI systems — including trained models, proprietary algorithms, and curated datasets — can be recognised and valued as intangible assets under both IFRS and US GAAP when they meet the standard recognition criteria.

How do you value machine learning models in an acquisition?

Machine learning models are valued in acquisitions using the Cost Approach (reproduction cost), Income Approach (incremental cash flows), or Market Approach, considering the model's accuracy, data moat, and remaining useful life.