The Value You Can’t See—But Can’t Ignore

Finishing my M&A course at Imperial Business School clarified something quietly nagging me for years.

Everyone talks about revenue, EBITDA, and cash flow in the rush to evaluate companies.

The spreadsheets and models grow larger and more complex, yet the most critical drivers of value—the intangibles—are overlooked.

Let’s be honest.

• How often do we quantify the loyalty of a customer base?

• The potential of a scalable platform?

• What is the worth of clean, actionable data?

These things build tomorrow’s businesses yet are invisible in most valuation discussions.

Why?

Because they’re “hard to measure.”

That’s the excuse.

But here’s the truth: what’s hard to measure is often where the real value lies.

I’ve wrestled with this problem, driven by one idea:

• What if we could make the intangibles tangible?

• What if we could create a framework that uncovers not just what a business earns today but what it could earn tomorrow?

Not just its cash flow but its capability to scale, retain customers, and unlock new growth.

So, I built this Evaluation Framework.

The Five Pillars of the Framework

The framework takes what’s often considered intangible—like customer loyalty or platform scalability—and translates it into something actionable. It evaluates five critical pillars, each designed to capture a dimension of value that traditional valuation methods miss:

1. Revenue Contributions from Digital Assets

• What it captures: The direct and indirect impact of digital channels on a company’s revenue.

• Why it matters: In today’s economy, the ability to generate revenue through e-commerce, digital subscriptions, or online platforms is a key indicator of growth potential.

Example questions:

• How much of your total revenue comes from digital channels?

• Are these streams growing or stagnant?

• What percentage of this revenue is recurring, like subscriptions?

2. Customer Loyalty and Retention

• What it captures: The value of a company’s ability to retain and engage its customers over time.

• Why it matters: Loyal customers mean recurring revenue, reduced acquisition costs, and long-term growth. High churn rates, on the other hand, signal risk.

Example questions:

• What’s your customer lifetime value (CLV)?

• How effectively are you retaining your most profitable customer segments?

• What’s your churn rate, and what’s driving it?

3. Scalability of Systems and Platforms

• What it captures: The ability of a company’s digital infrastructure to handle future growth without major reinvestments.

• Why it matters: Businesses with scalable systems can grow faster and more efficiently, while those with limited scalability face bottlenecks and escalating costs.

Example questions:

• Can your platform support 2x or 5x user growth?

• What’s your infrastructure’s uptime, and how does it compare to industry standards?

• Are there any scalability risks that could limit expansion?

4. The Value and Cleanliness of Data

• What it captures: The quality, usability, and compliance of the data a company collects and manages.

• Why it matters: Clean, actionable data is a valuable asset for decision-making, personalisation, and operational efficiencies, while poor data governance can lead to compliance penalties.

Example questions:

• What percentage of your data is clean and actionable?

• How monetisable is your data, either directly or through operational insights?

• Are you at risk of penalties for non-compliance with regulations like GDPR or CCPA?

5. Post-Acquisition Synergies and Integration Readiness

• What it captures: The potential value of synergies and the readiness of digital systems for integration after a merger or acquisition.

• Why it matters: Many M&A deals fail to deliver expected value because synergies are overestimated, and integration challenges are underestimated.

Example questions:

• What revenue synergies can be realised by combining digital systems?

• Are there any integration risks, like incompatible platforms or overlapping processes?

• How do your systems align with the acquiring company’s infrastructure?

Turning Intangibles into Tangibles

This framework goes beyond the numbers most people are comfortable with.

It quantifies the invisible drivers of value and transforms them into actionable insights.

• For a buyer, it uncovers hidden opportunities and risks—ensuring you don’t overpay or miss synergies.

• For a seller, it provides a data-backed story that justifies premium valuations.

• For a business leader, it clarifies the levers that will drive future growth.

Their buildings or physical inventory won’t define the companies of tomorrow—they’ll be determined by their ability to retain customers, scale systems, and monetise data. And the CEOs who measure and optimise those intangibles will be the ones who win.

If your current valuations only tell part of the story, maybe it’s time to start looking deeper.

Let’s uncover the value you’ve already built.