How to value data and intellectual property in an SME?
Introduction
When selling a business, managers naturally focus on tangible figures: turnover, profits, physical assets. Yet, a significant portion of a modern SME's value lies in its intangible assets: intellectual property, customer data, proprietary algorithms, or technical know-how.
These assets, invisible on the balance sheet, can represent 30 to 70% of a company's total value, particularly in technology, digital or innovative sectors. But they often remain undervalued, or even completely omitted from the SME valuation process.
The problem? These assets are difficult to identify, complex to quantify, and delicate to present to a potential buyer. A poorly documented patent, a customer database without clear structure, or an algorithm without legal protection quickly lose their perceived value.
This guide supports you in precisely identifying your intangible assets, valuing them according to recognised methods, and presenting them effectively during your sale. You will also discover common mistakes that can reduce your valuation by several tens of thousands of francs.
📌 Summary (TL;DR)
Intangible assets such as patents, trademarks, customer databases and algorithms often represent 30 to 70% of a modern SME's value, but remain undervalued. This guide presents valuation methods adapted to each type of asset, explains how to document and present them to buyers, and identifies mistakes that can compromise your valuation.
📚 Table of contents
What are the intangible assets of an SME?
Intangible assets represent all resources without physical substance that contribute to a company's value. In a Swiss SME, they include four main categories:
- Intellectual property: patents, registered trademarks, copyrights, licences
- Data: customer databases, behavioural data, operational and predictive data
- Technical know-how: proprietary processes, algorithms, methodologies, source codes
- Relational capital: recurring customer contracts, strategic partnerships, commercial network
These assets are often absent from traditional balance sheets, as Swiss accounting favours a prudent approach. Yet, they frequently constitute the majority of a company's real value, particularly in tech, digital, SaaS or innovative sectors.
Their valuation requires a specific approach, distinct from traditional methods based solely on tangible assets and financial flows.
Valuation methods by asset type
Valuing intangible assets requires methods adapted to each category. There is no single approach: each type of asset responds to different economic and legal logics.
The three main approaches are:
- Cost approach: calculation of investments required to recreate the asset (development, registration, legal protection)
- Income approach: estimation of future financial flows generated directly by the asset
- Comparison approach: analysis of similar transactions in the market or sector
The choice of method depends on the nature of the asset, its maturity and available data. The following sections detail the practical application of these approaches for each category of intangible asset.
Intellectual property: patents, trademarks and rights
Patents are valued according to three complementary methods. The cost approach calculates R&D and registration expenses. The income approach estimates royalties or savings generated by the patent. The comparable approach relies on transactions of similar patents in the sector.
For registered trademarks, value depends on three factors: measurable awareness (traffic, mentions), competitive positioning and revenues directly attributable to the brand. A trademark registered with the Swiss Federal Institute of Intellectual Property (IPI) offers legal protection that strengthens its value.
The copyrights and licences are valued primarily by the revenue streams they generate. Complete documentation of legal protection is essential to justify the valuation to buyers.
Databases and customer capital
The value of a customer database depends on four measurable criteria: size (number of qualified contacts), quality (segmentation, completeness), engagement rate (opening, conversion) and legal compliance (GDPR, Swiss DPA).
The most robust valuation method combines customer acquisition cost (CAC) and lifetime value (LTV). For example, a database of 5,000 customers with a CAC of 200 CHF and an LTV of 3,000 CHF represents substantial value, especially if the retention rate is high.
Behavioural data (purchase history, preferences, journeys) and predictive data (scoring, propensity models) constitute value multipliers. Their effective exploitation and technical documentation significantly increase the company's attractiveness.
Compliance with the Federal Data Protection Act is a non-negotiable prerequisite for valuing these assets.
Algorithms, software and technical know-how
Proprietary algorithms, source codes and predictive models are valued along two axes. The cost approach calculates development hours, skills mobilised and tests performed. The income approach estimates financial gains generated: operational savings, new revenues, measurable competitive advantages.
Valuation depends heavily on technical documentation: architecture, commented code, performance tests, maintenance. A well-documented and transferable algorithm is worth significantly more than obscure code dependent on a single developer.
For companies based on artificial intelligence, valuation incorporates specific criteria: quality of training data, model performance, technical scalability. Consult our detailed guide on valuing AI-dependent businesses to explore these aspects further.
How to present these assets to a buyer
The structured presentation of intangible assets directly influences the perception of value by potential buyers. Here are the essential steps:
1. Create a comprehensive inventory
List all intangible assets with their legal status: filed patents, registered trademarks, databases, documented algorithms, strategic customer contracts.
2. Provide tangible evidence
Gather registration certificates, licence agreements, usage metrics captures, customer testimonials, technical performance analyses. Quantified data strengthens credibility.
3. Quantify financial impact
Demonstrate each asset's contribution to revenues or savings: revenues generated by a licence, operational savings from an algorithm, conversion rate of a customer database.
4. Prepare technical and legal documentation
Anticipate due diligence questions: technical architecture, legal compliance, ownership rights, external dependencies, maintenance contracts.
On Leez, you can structure this information in your listing to maximise your company's attractiveness. A clear presentation of intangible assets accelerates discussions with qualified buyers.
Common mistakes to avoid
Five mistakes regularly compromise the valuation of intangible assets:
1. Absence of legal protection
Unfiled patents, unregistered trademarks or source codes without contractual protection lose most of their value. Legal protection is a prerequisite, not an option.
2. Overvaluation without evidence
Assigning high value to an algorithm that generates no measurable revenue or to a database never exploited arouses buyers' suspicion. Valuation must be based on verifiable facts. Consult our article on the risks of overvaluation.
3. Regulatory non-compliance
Personal data not compliant with the Swiss DPA, irregular software licences or expired patents cancel the value of the assets concerned.
4. Dependence on key individuals
Technical know-how concentrated in a single person, without documentation or possible transfer, represents a major risk for the buyer.
5. Obsolete or unmaintained assets
Algorithms based on outdated technologies or databases not updated for several years have zero or negative value.
Intangible assets often represent a significant portion of an SME's value, but they remain undervalued due to lack of documentation and structured presentation. Patents, trademarks, customer databases, algorithms and technical know-how constitute concrete valuation levers, provided they are identified, protected and quantified according to recognised methods.
The key lies in preparation: gathering proof of ownership, documenting processes, demonstrating the recurrence of revenues linked to these assets, and presenting everything clearly and accessibly to potential buyers. Common mistakes, absence of legal protection, unstructured data, personal dependence, can drastically reduce perceived value.
Before starting a sale, estimate your company's value free of charge taking into account all your assets, both tangible and intangible. Leez supports you in this process with simple tools and a network of experts available to secure your succession.
