The key assets of a modern company
In the past it was machines, factories and other expensive capital goods that were the main value of a company. However today in the modern digital driven knowledge economy the main assets leave the office each afternoon and come back in the morning.
As an investor we evaluate a potential investment by analysing the following main assets:
People are the most important contributor to success in any company. You need to have smart people with the right skills. And even more importantly that you want a team. Because if the right people work together, they can accomplish anything and a group of people not working together will not accomplish anything.
Culture can both break or make a company. That is why one of the main jobs of the CEO is to be the Chief Culture Officer. Culture is the invisible glue and atmosphere is an organisation. Get it right and you cam make miracles.
It is the customers that pays the bill. Thus the customers are key, both for new sales to existing customers, but also for reference value to new customers. Everyone wants to buy what is proven.
Intellectual property is accumulated knowledge. It can be patents, software, design, methodology etc. Valuable intellectual property can change your business from a low margin service to a highly scalable, high margin business.
The brand is what your customers, users, market, employees and other interacting with your company perceives it to be. It is the sum of the experience they have over time, and in a way all other assets of the company accumulates into the brand.
So to create value make sure you grow the assets of your company. Of course you need to focus on the business model, the products, the marketing and finding the right market opportunites.However if you have the core assets in place, you most likely get this right as well.
Author: Aleksander Farstad, Founding Partner