What are common mistakes when valuating intangible assets?

Full Explanation

Mistake 1: Assuming ownership = value. A patent you own is only valuable if it prevents competitors from doing something profitable. A patent on an obsolete technology is worthless. Mistake 2: Confusing intangible asset strength with company performance. A strong brand is valuable only if it translates to pricing power, loyalty, or lower churn. High brand awareness without preference is expensive marketing, not brand asset. Mistake 3: Overestimating defensibility. Trade secrets are only defensible if employees don't leave and start competitors. Algorithms can be reverse-engineered or improved. Data advantages erode if competitors access the same data source. Mistake 4: Missing retention risks. A customer relationship asset is valuable only if customers stay. High churn means the asset is depreciating. Mistake 5: Failing to quantify impact. "We have great technology" is not a valuation argument. "Our technology reduces churn by 10%, worth £2M annually" is. Mistake 6: Overvaluing key person dependencies. If the company entirely depends on the CEO, the asset is actually a liability—investors will discount heavily. Mistake 7: Ignoring regulatory risk. A data asset might be valuable today but worthless if GDPR changes restrict usage. Opagio's framework forces discipline: quantify intangible assets, evidence competitive advantage, and link to financial outcomes.

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