The Acquirers Podcast Intangible Value Investing Using AI + NLP with Kai Wu of Sparkline Capital | S07 E32
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Sep 18, 2025 Kai Wu, Founder of Sparkline Capital, dives into the fascinating world of intangible value investing. He outlines Sparkline's unique approach that quantifies intellectual property and brand strength, alongside the pivotal role of human capital and network effects. The discussion explores the impact of AI on capital investments and how corporate cash strategies vary by industry lifecycle. Additionally, Kai adapts factor investing principles to the crypto space, emphasizing the predictive power of intangible metrics beyond just technology companies.
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Intangibles Are Central To Modern Valuation
- Intangible assets (IP, brand, human capital, network effects) now form a growing share of company value.
- Sparkline adjusts valuation frameworks to account for these nonphysical assets quantitatively.
Accounting Penalizes Intangible Investment
- Accounting treats R&D and marketing as expenses while physical CapEx is capitalized, understating intangible-rich firms.
- Capitalizing and amortizing intangibles produces a truer balance sheet and alters relative valuations.
Use Alternative Data To Quantify Intangibles
- Go beyond filings and mine unstructured alternative data (patents, social, LinkedIn, GitHub) to quantify intangible pillars.
- Convert those signals into structured factors and combine them into an ensemble valuation model.
