tech
February 12, 2026
Understanding the valuation of intangible assets in tech deals
In a technology M&A deal, whether you are acquiring or selling a tech or software business, valuation rarely hinges on a single dimension.
TL;DR
- Valuation in tech M&A considers both tangible financial performance and intangible assets.
- Intangible assets include proprietary software, intellectual property, datasets, customer relationships, brand equity, and internal systems.
- Tangible performance metrics (revenue, margins, retention) set the valuation floor.
- Intangible assets (customer capital, human capital, structural capital, strategic alliance capital) influence a company's durability, transferability, and defensibility.
- Valuation methodologies for intangible assets include the cost approach, income approach, and transferability analysis.
- Clearly articulating intangible assets can improve negotiation leverage and support higher valuations.
- The balance between proven financial performance and defensible intangible assets drives the highest valuations in software companies.
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