Software Valuation

Software, apps, and any other digital products are intangible assets, and it can be challenging to determine their value. Many software developers and companies are often approached to purchase or have them sell their software. In this case, getting a valuation for software is a must.

What is Software Valuation?

Software valuation is the process of determining the worth of a software product, company, or asset. It’s used in contexts such as startup funding, M&A, and buying and selling software products. Valuation methods consider factors such as recurring revenue, growth rate, customer retention, costs, market demand, and competitive advantages.

The challenge with software is that its value comes primarily from intangibles rather than physical assets or production costs. A software product might cost relatively little to develop but be worth millions if it solves critical problems at scale, making traditional valuation methods need adaptation for the software context.

Why Software Valuation is Important?

Without proper valuation, companies risk making poor financial decisions, investors might miss opportunities, and stakeholders lack the information needed to assess the potential of software.

Software valuation is important for several key reasons:

• For transactions & Sales – When you determine the value of your software, you can justify the purchase or sale of software assets. If you’re offered a deal to sell your software to a company, getting a professional valuation helps you set a fair price that ensures profitability and market value.
• Mergers and acquisitions – Both buyers and sellers need a fair price when acquiring or selling software companies or products, ensuring neither party overpays or undersells.
• Financial reporting and compliance – Companies must accurately report the value of their software assets on balance sheets for accounting standards, tax purposes, and regulatory compliance.
• Strategic planning – Understanding the value of software assets helps companies make informed decisions about where to invest resources, which products to develop further, and which to sunset.
• Licensing and IP transactions – When selling or licensing software intellectual property, proper valuation ensures fair compensation and helps structure deals.
• Litigation and disputes – In cases involving patent violations, partnership dissolutions, or divorce proceedings, courts need objective software valuations to determine damages.
• Monitoring Performance – Tracking software value over time helps companies assess whether their development investments are paying off and creating actual business value.

Eqvista’s Software Valuation Methodology

Eqvista provides comprehensive software valuation services conducted by NACVA-certified analysts, with full customer support. Valuations apply industry-standard methods to determine fair value across SaaS and digital asset models.

Proven Valuation Approaches

To deliver fair and defensible valuations, Eqvista leverages established financial methodologies tailored to the software.

Income Approach

• Measures value based on future earnings and cash flows
• Particularly suited for SaaS companies

Market Approach

• Compares transactions of similar software packages
• Uses industry benchmarks and comparable sales

Asset Approach

• Uses historical cost analysis
• Employs cost-to-reproduce methods

Aside from the three valuation methods, Eqvista’s software valuation also includes expert analysis of the software’s technological strength, adaptability, and IP rights protection, all of which act as key value drivers. These factors influence how scalable, defensible, and commercially appealing the software is, and are carefully assessed alongside financial metrics to arrive at a well-supported valuation.

Software Valuation Report

Eqvista provides fully-customized valuation reports to clients with an overview on the process, graphs, and valuation methods used. Prepared by our team of NACVA certified valuation analysts, our valuation report sets an accurate fair market value (FMV) of your software.

What’s Included in Your Report

Our detailed valuation reports include:

• Overview of all valuation methods applied
• Executive summary of findings and conclusions
• Detailed analysis of the three valuation approaches
• Assessment of critical value drivers (technology, functionality, adaptability, documentation)
• Market analysis and comparable transaction data
• Financial projections and assumptions
• Visual representations, including graphs and charts
• Supporting documentation and data sources
• Explanation of methodology and limiting conditions
• Professional certifications and analyst credentials

Why Choose Eqvista For Software Valuation

Choosing the right partner for your software valuation is critical. At Eqvista, we combine certified expertise, in-depth analysis, and industry expertise to deliver valuations you can trust and defend.

• NACVA-Certified Expertise – Our valuation analysts hold NACVA certifications, ensuring the highest standards of professional competence and practice.
• Comprehensive Analysis – We go beyond simple calculations to provide deep insights into technology, functionality, market position, and strategic value drivers.
• IRS-Compliant Reports – All valuations are conducted in accordance with IRS standards and industry best practices, providing defensible, audit-ready documentation.
• Industry Experience – With extensive experience valuing software across industries from SaaS platforms to enterprise applications, we understand the unique characteristics that drive software value.
• Full Support Throughout – Our team provides complete customer service support throughout the valuation process, answering questions and ensuring you understand every aspect of your report.
• Timely & Professional Delivery – We conduct valuations in a seamless, accurate, and professional manner with efficient turnaround times that meet your business deadlines.

Ready to Understand What Your Software is Really Worth?

Your software represents years of development, innovation, and value creation. Isn’t it time you knew exactly what it’s worth? Whether you’re preparing for a sale, seeking investment, or making strategic decisions, a professional software valuation gives you credibility.

At Eqvista, our NACVA-certified analysts bring deep expertise in software valuation, from early-stage SaaS startups to established enterprises. We analyze your software using proven approaches and deliver a detailed report. Throughout the process, our team provides full support and ensures you understand every aspect of your valuation. Contact us today to discuss your software valuation needs.