Market Approach (Valuation)

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 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.

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.

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.

The convergence of digital technologies with healthcare, encompassing telemedicine, electronic health records, wearable devices, AI-assisted diagnostics, digital therapeutics, and health data analytics. Digital health companies create significant intangible asset value through proprietary algorithms, patient data assets, regulatory approvals, and clinical evidence — all of which require specialist valuation approaches.

A valuation method that estimates the present value of a company based on projections of its future free cash flows, discounted back to today at the cost of capital. DCF valuations are sensitive to growth assumptions and are often used alongside multiples-based approaches.

A situation in which one party in a transaction possesses more or better information than the other, creating an imbalance that can affect pricing and deal outcomes. Information asymmetry is particularly acute in intangible-heavy businesses, where the true value of assets such as proprietary data, know-how, and relationships is difficult for external parties to assess.

A valuation methodology that determines the total value of a diversified company by independently valuing each business segment, product line, or asset category and aggregating the results. Sum-of-the-parts analysis is particularly useful when a conglomerate's divisions operate in different industries with distinct risk profiles, growth rates, and comparable company sets.

How do you value technology assets in a business acquisition?

Technology assets are valued using the Relief from Royalty method (for licensed technology) or the Cost Approach (for proprietary software), considering obsolescence risk, remaining useful life, and competitive differentiation.

What royalty rate is used to value IP for lending?

There is no single fixed rate. Valuers derive it from comparable market licences for similar IP, and for lending they deliberately use a low-end, conservative rate to avoid overstating collateral value.

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.