Brand isn’t vanity. It’s a valuation multiplier.

Today's market is nothing like the one Benjamin Graham chronicled or Warren Buffett conquered. Retail investors are more active and influential than ever. In 2015, 6% of 25-year-olds were actively investing; by 2024, that number jumped to 37%, and retail flows surged 50% from 2023 into mid-2025 (Source). Who decides what a company is worth has changed, and the traditional valuation playbook hasn't kept up. It’s no longer solely based on balance sheets or business fundamentals, as narrative can sway mass investor opinion.

In this environment, there aren’t a lot of vetted tools to quantify narrative. But we do have a proven set of measures that’s close to a hundred years old: brand health tracking. While marketing and investing trends have come and gone, we’ve been measuring funnel metrics like awareness, consideration, usage, and preference for close to a century. As a firm, we asked the question: can brand health metrics provide meaningful insight alongside more standard investor metrics like ARR, LTV to CAC ratio, and NRR, Rule of 40, etc.? We put it to the test to see if we can find more signals in this era of noise.

We turned to two long-term partners. Bella Private Markets is a long-standing research partner of WestCap. Led by Josh Lerner, a professor at Harvard Business School and WestCap senior advisor, the Bella team brings quantitative firepower to questions about the private markets. Tracksuit is a brand tracking platform our operators introduced into the portfolio; they measure brand health for 3,500+ businesses globally. We asked both: can we quantify the relationship between brand health and company value?

Their study analyzed Tracksuit’s monthly brand health survey data against valuation as defined by market capitalization as well as the more nuanced Total Enterprise Value (TEV = Market Cap + Debt + Preferred Stock + Minority Interests - Cash) for 21 publicly traded companies — including Airbnb, Amazon, Reddit, Optimum, and others — from December 2021 through April 2026, yielding 611 company-month observations where we could match brand metrics with detailed valuation data. Bella ran both standard and fixed-effects regression analysis, with the latter controlling for structural company-level factors that would naturally inflate TEV regardless of brand performance.

The results: we found evidence of a Brand Value Multiplier. Brand measures like awareness (aided), consideration, usage, and preference all had a positive and significant correlation with market cap and total enterprise value. In our dataset, we observed that a 10% increase in awareness correlated with a 25% increase in market cap and 16.8% increase in TEV. What’s more, a 10% increase in consideration correlated with a staggering 36.4% increase in market cap and 20.2% increase in TEV. While correlation doesn’t prove causation, the size of the effect alone across our sample was enough to warrant further study.

A few interesting observations. First off, as we might have guessed, brand has a stronger effect on market cap. One explanation could be that broad consumer sentiment influences investor sentiment, though we didn’t explore that theory directly in this study. Alternatively, the mechanism could also be that business success that is recognized by investors pushes brand metrics up. Second, even when you expand out the analysis to the additional factors included in TEV like debt, preferred stock, minority interests, and cash, the correlation holds. This could suggest this isn’t just a case of perception driving valuation, but one where brand health is reflective of business health. In today’s world where company financial information is increasingly available and accessible, business performance and brand perception are linked.

Now, this is a preliminary inquiry and we are not suggesting that a sample of 21 companies over 4 years is enough to establish a universal rule. The analysis covers only public companies, where granular market cap and TEV data is readily available. But these initial findings are meaningful evidence that brand is a viable signal of value in today’s more volatile markets. A signal that most investors aren't looking at as closely as they should.

For WestCap, this matters in two ways: as investors, it sharpens our diligence lens in that brand health data may help us quantify value that others might miss. And as operators, it gives us another way to measure the value our team generates when they execute a brand strategy or design project for a portfolio company. This validates something we’ve always believed: investing in improving brand perceptions isn’t just about growing sales, it’s about increasing the value of the business itself. It’s a part of the idea WestCap was founded on: Operating Equity. Smarter capital coupled with stronger operating expertise builds better businesses.

We're continuing this analysis with Bella and Tracksuit. The goal is a larger dataset, ideally spanning more companies, more years, and eventually private market valuations through secondary market data. We’ll continue to share our findings, but more importantly, put them to work for our investors and founders.

See the data for yourself here.