Blending Intangibles

Brands would now be made up of vast amounts of intangible assets spread out across employees, IP, brand and products. However, many of these assets would also overlap with each other. In the case of a software product, it would have all employees working on it assigned to its aggregated total of asset. Each transaction for employee would then also add to the intangible asset’s total.

This is now how you would be able to view relative owners of an intangible's value. For instance, a senior engineer assigned to a product from its conception would know it inside and out. Their own asset value would have increased at the same rate of intangible’s value. However, a new engineer would also now join the team. Because the original engineer had more transactions prior to the other joining, their yield multiplier would be more. Meaning, those whom have more experience with a given intangible asset would thereby be able to more quickly multiply its value.

Because earlier entrants to the intangible would have higher transaction ability, they would likewise always have a higher ratio of ownership of said asset’s yield representing their impact towards the intangible.

This now drives home the importance of accounting for intangibles much the same way as tangible assets. As so much overlap would be occurring, each positive transaction would be flagged as representing its own intangible asset. For developers this could be brand, python (code), and the company’s intangible product. This would then solidify their ratios of intangible assets to the bottom line.

For skills based workers, then, they’d have their overall asset value but be able to derive all their experience down to classifications of intangible. Their highest ratio intangible skills would then be an indicator that their yield ability would be greater when using that given skill.

Mergers, Acquisitions and Resource Management

As intangible assets would now be better classified, businesses would now be able to more accurately assess what components of an intangible asset actually impact revenues and likewise are worth investing within.

A software product for example may have two engineers yielding the highest ratios of a given intangible. If removed from the product, the intangible asset value would decrease relative to those engineer’s intangible asset values but its revenues would stay the same. However, because those engineer’s were contributing to the asset’s higher yield, the intangible asset’s overall yield would then slow down representing the loss of experience. This, again, would not erode revenue of the intangible but it would represent a loss in its velocity of producing more yield.

This velocity measurement would then be the defining assessment of all intangible asset acquisitions. It would represent how quickly a given asset would produce yield when placed within another overlapping intangible. A business would decide that although an intangible’s yield may go down, by moving engineers to a new product, it would have a higher chance of creating a new intangible asset yielding benefit more quickly.

For mergers and acquisitions, then, a company would look at overlapping intangibles and see the velocity at which an acquisition would net them a returning yield. If the intangible asset is drastically higher than its revenue ratio, it would be a better target for acquisition.

As brand would be its own intangible, products and services that are decoupled from brand would then be represented as having a higher yield regardless of who would be holding the overall asset. This is how companies looking to acquire would be able to better associate their risk of no yield when re-aligning where an intangible would ultimately impact.

Pricing an intangible would ultimately come down to viewing where intangibles overlap relative the brand’s total asset value. For example a brand’s asset may be valued at $100 but its intangible value would be $500. However, brand represents $200 of the $500 intangible price. As a new brand would already have its own branding events the actual cost of intangibles would then be $300. The company would then be valued relative to its purchaser’s allotment of intangible assets.

As the company would be acquired for $300, more than its total asset, the payout would be in the form of buying into the new firm’s asset liquidity pool at that price. Meaning that owners of the yield would then instantly be entitled to the acquiring company’s yield relative to how much the purchase price increased the new asset’s value. The owners of the previous intangible asset, then, would reap the rewards of their sale immediately in the form of the new company’s yield. The new company, now having its intangible asset ratios and yield ownership ratios being readjusted would be incentivized to ensure the acquired intangible assets are operationalized sooner rather than later.

This would also give regulators a new metric for approving mergers and acquisitions. As each company would have its intangibles categorized, there would be a ratio for how much overlap a company would have for acquiring an asset. A higher ratio would indicate that a company would not be a good target as they’d share more overlap than market differences. To the economy, this would mean the overlap would potentially decrease employee employment as a firm wouldn’t need the duplicative intangibles. Meanwhile a company with a low ratio of overlap would represent an opportunity for an acquisition to grow a new market segment. Something more capital would help with and have less a chance of needed headcount adjustment.

Acquisitions, then, would be all about making intangible assets better utilize their given ratios and multiplying a brand’s overall yield rate. By better acquiring non-overlapping intangibles allows companies to use their already established capital as a multiplier for intangible assets.

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