Answers · Valuation & Worth
How much of a tech company's value comes from IP and intangibles?
Updated June 2026
The short answer
Intangible assets, the category spanning patents, software, data, brands, and know-how, are commonly estimated at half or more of large technology company value. The most widely cited studies put intangibles near 90 percent of S&P 500 market value, though the methodology is contested and the figure measures everything not on the balance sheet, not patents specifically.
For an operating company, the useful question is narrower: how much of our value depends on things we could actually protect, and are we protecting them.
What the headline studies actually measure
The famous percentages are residuals: market capitalization minus tangible book value, with the gap labeled intangible. That gap includes patents and trade secrets, but also brand, network effects, workforce, data, and plain growth expectations, which is why critics note the same arithmetic would call a market bubble an intangible asset. The precise share is genuinely contested.
The direction is not. Across decades of published analysis, value in technology-driven companies has migrated decisively from plant and inventory to knowledge assets, and half or more is a defensible characterization for large technology companies under most methodologies. The strategic implication survives every methodological quarrel: the majority of what acquirers and markets pay for in tech is not a thing you can point to on a shop floor.
Where patents sit inside the intangible stack
The cleanest public evidence comes from purchase price allocations, where acquirers must itemize what they bought at fair value. In those disclosures, developed technology and patents are consistently one material slice alongside customer relationships, trademarks, and a large goodwill residual. Patents are rarely the majority of the intangible value on their own, and that understates their role: they are the slice with legal teeth, the mechanism that keeps competitors from simply taking the rest.
The other consistent finding from our 2,000+ engagements is that the largest intangible slice is often the least managed: trade secrets and know-how that nobody has inventoried, valued, or formally protected. Companies tend to govern what they can count, which means the patent portfolio gets a budget line while the know-how that makes it work goes unmapped.
Making the number useful for your own company
The S&P-wide figure is a conversation opener for a board, not a management tool. The management tool is a company-specific version of the same analysis: identify the intangibles, map them to the revenue they protect, and value the material ones. That exercise routinely changes decisions, from which patents to maintain, to what to formalize as trade secrets, to how the IP story gets told in the next financing or exit. It is the core of our ipValuation and IP strategy work, and it scales from a focused analysis to full-portfolio programs.
Related questions
Is the 90 percent figure reliable?
Treat it as directional. It comes from a market-cap-minus-book-value calculation that bundles growth expectations and every knowledge asset into one residual. The robust takeaway is the multi-decade shift toward intangible value, not the decimal.
How do we measure the share for our own company?
A PPA-style exercise without the transaction: identify the intangible assets, map each to the revenue or cost advantage it supports, and value the material ones with stated methods. Acquirers will eventually run this on you; running it first means you control the narrative.
Do patents specifically correlate with higher company value?
Published research commonly associates patenting with better fundraising, survival, and exit outcomes, with the strongest effects in sectors where imitation is the main competitive risk. Correlation varies by industry and study; portfolio quality drives far more than count.
Does any of this apply to a small company?
Often more sharply. A startup's value can be almost entirely intangible, technology, team, and data, with no diversified revenue to cushion a protection failure. The smaller the company, the larger the share of its valuation that one unprotected asset can represent.
Find out what your intangibles are actually worth
If most of your company's value is intangible, it deserves more than a goodwill line. We can scope an IP valuation sized to your portfolio on a free discovery call.
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ipCapital Group is a consultancy, not a law firm, and nothing on this page is legal advice. Dollar figures on this page are typical market ranges for professional IP services, drawn from published sources and industry experience across a variety of providers. They are not an ipCG quote or rate card; every ipCG engagement is individually scoped and priced. See how our pricing works.