The importance of intellectual assets when estimating the value of a company
The proper inclusion of IP as part of a company’s valuation process can improve their negotiation position when seeking financing. On average in Europe, 40% of a company’s value is represented by intangible assets (intellectual assets, but also brand, ecosystems and partnerships), and this share is continuously growing (i.e. by 29% in the last 25 years) Moreover, intangible assets are even more consequential in fast growing high-tech companies, such as space tech, due to their strong focus on R&D.
Nevertheless, unfortunately many organisations often fail to understand the value of their intellectual assets (software, IPR, R&D, knowledge and know-how resulting from R&D, databases, etc.) and the associated risks. Fast-growing high-tech companies additionally face other pressing issues such as developing their product, hiring employees, raising capital and more. As a result, companies may place their priorities elsewhere within their internal operations and fail to benefit from a thorough intellectual asset valuation.
“Assessing and valuing a company only utilising one valuation approach is like the parable of the blind men describing an elephant. Depending on the viewpoint, a company may be described and perceived very differently. That’s why in our experience it’s always important to assess the context of the company analysis, frame the analysis correctly, and to utilise multiple fit-for-purpose valuation methods to reveal the full and most accurate picture.” Tuomas Nousiainen, Apollonian
The good news is that e-shape partner, Evenflow – leader of the Sustainability Booster – offers a solution to these issues. Having partnered with Apollonian – a company specialised in deeptech valuations, Evenflow provides a SAAS-based deep tech valuation tool to start-ups and other SMEs in the space industry. This tool runs sophisticated models complemented by expert assessments. One of the added values of this tool (compared to other valuation bodies) is the focus on intellectual assets representing an important part of space high-tech value. These assets reveal if a company will survive and prosper in a competitive environment over the long haul.