The multiple you're losing to weak brand
27th July 2026
Brand Strategy
Think differently about brand early and see the benefit later
I've sat in enough value creation planning sessions now to notice a pattern. Ops improvement plan: detailed, numbered, owned by someone. Commercial excellence plan: same. Pricing strategy: usually a whole workstream. Brand? A line item under "marketing," usually the first thing cut when the 100-day plan gets tight. And I get why. Brand feels soft. It doesn't show up on a diligence checklist the way working capital or customer concentration does. Nobody's ever lost an IC vote because they couldn't quantify brand equity.
But here's the thing I keep coming back to with the founder-led and PE-backed businesses we work with at Faber: brand isn't a marketing line. It's a multiple problem. And most operating partners are managing it by accident rather than on purpose. The gap that doesn't show up in the model. We talk to clients about something we call the value gap the distance between what a business is actually worth (its technology, its delivery, its numbers) and what the market is willing to pay for it because of how it's perceived getting there.
That gap is invisible in a financial model.
It shows up nowhere in an EBITDA bridge. But it's very visible in three places that PE firms care about a great deal: the price you pay going in, the multiple you achieve going out, and everything that happens to working capital and margin in between.
If you've ever looked at a portfolio company that's technically excellent, retention numbers are strong, NPS is solid, and still finds itself getting squeezed on price, re-tendered more than it should be, or quietly passed over for a bigger logo with a worse product that's not a sales execution problem. That's the value gap doing its work.
Where it actually hits the numbers
Entry multiple. A business that's perceived as the safe, obvious, category-defining choice gets paid for that certainty. A business with an equivalent P&L but a muddled or invisible market position gets discounted for the ambiguity, because the buyer is pricing in the work of fixing it. If you're on the buy side, that ambiguity is your negotiating leverage. If you're the seller, it's costing you real money before a single lawyer gets involved. Pricing and margin, live in the business. Every portfolio company we've looked at closely has a version of this: procurement pushes hardest on the vendor they're least sure about. Not the worst vendor — the least legible one. Being genuinely uncertain about a company's category position is expensive, on every renewal, every year you hold it. Sales cycle, and therefore cash. Weak brand doesn't lose you the deal outright most of the time. It taxes you in time. Extra reference calls. A second round of "just to be sure" validation. Sign-off that stalls because nobody on the buying committee wants to be the one who vouched for the name nobody's heard of. That's not a CAC problem you can fix by hiring more SDRs it's friction baked into how the market currently understands you, and it shows up as revenue landing later than your model said it would. Win rate against a worse product. This is the one that actually gets debated in QBRs, usually without anyone naming it correctly. "We lost to a weaker competitor" isn't a product story nine times out of ten. It's that the other business gets trusted by default and yours gets interrogated by default. Two shortlisted vendors are never evaluated symmetrically once perception has already made a decision the buying committee hasn't consciously registered. Exit multiple. Everything above compounds, quietly, for the length of the hold period and then it all lands on one number in the data room. A buyer pricing the exit isn't just pricing your last twelve months of revenue. They're pricing how defensible your position looks going forward, and "defensible" is a brand question wearing a strategy costume.
Why this gets missed
Because brand investment has historically been sold and bought as output a new logo, a slicker deck, a rebrand nobody in the business actually asked for the finance side of the house has learned, reasonably, to be sceptical of it. Nobody wants to fund "vibes." That scepticism is earned. Most brand work doesn't touch the P&L because most brand work was never built to. It was built to look good, not to close the value gap.
The work that actually moves the numbers above starts somewhere else entirely: with a clear, evidenced answer to why a buyer should prefer you specifically, tightened until sales, marketing and the leadership team are all telling the same story to the market and then held consistently long enough for perception to catch up to reality. That's a strategy exercise before it's ever a design one.
