What’s a Brand Worth?

Photo by Reuben Mansell on Unsplash

Glossier’s staggering $1.8 billion valuation was not about factories or stockpiles of products. It was built on something less tangible: a clean pink aesthetic, a fiercely loyal online community, and a brand that felt deeply personal. SKIMS grew from the same idea, turning cultural influence into profit. When Coty bought a majority stake in Kylie Cosmetics for $600 million, it wasn’t making a bet on makeup. It was investing in Kylie Jenner’s personal brand and the audience that came with it.

Today, brand equity is often a startup’s most valuable asset. But while markets have adapted to this reality, the law hasn’t. Many of the legal frameworks that govern business financing were built for a different era; one where value was physical, measurable, and relatively stable. The result is a growing disconnect between how companies are valued and how they’re treated under the law. What accountants once called “goodwill” now drives most of a company’s value. 

When Collateral Isn’t Physical

The law is still catching up with an economy that’s built on influence and identity. Under the Uniform Commercial Code (UCC) Article 9, businesses can use tangible assets, like inventory, real estate, or equipment, as collateral for loans. But it also says you can use “general intangibles” as collateral. The only problem? Those rules were made long before a TikTok following or a brand's aesthetic could be worth millions. 

So what happens when a startup’s most valuable asset isn’t physical at all? Can a lender take a security interest in a vibe?

Startups in beauty, fashion, and tech depend on intangible assets: consumer trust, brand reputation, and online engagement. These are fragile things. A founder can leave, a platform algorithm can shift, or a PR crisis can erase value overnight. You can repossess a car. You cannot repossess the following.

The Legal System Still Prefers Tangibles

Our legal system wasn’t designed to handle this. When the UCC was drafted in the 1950s, most businesses created value through tangible goods and physical infrastructure. Today, a company might exist entirely online and generate millions in revenue without owning a single physical asset.

Right now, there’s no clear legal category for brand equity, social media accounts, or goodwill. They’re not traditional intellectual property, but they’re far from worthless. Take the case of PhoneDog v. Kravitz, where a California court had to decide who really owned a company’s Twitter account after an employee walked out.  The case ultimately settled before a final ruling, leaving the core question unresolved. It still hinted that followers have real value, but it also showed just how unprepared the law is for assets that live partly in emotion and partly in code.

Even if a lender wanted to treat a brand like collateral, how would they put a price tag on it? How do you measure the value of engagement or a consistent aesthetic? And what happens if that engagement tanks? None of this fits neatly into the UCC’s idea of predictable, enforceable collateral.

Who Owns the Brand?

Assuming a brand could be used as collateral, figuring out who owns it isn’t always clear. Founders and employees often mix personal and corporate identities online. So, if a startup’s following is built around a founder’s personality, who owns that value? Is it the individual, or the company?

We’ve already seen versions of this fight. In PhoneDog, the company sued a former employee for keeping access to a Twitter account with 17,000 followers. The court saw that the account could be valuable but never actually ruled on who really owned it. Today, the same kind of confusion happens on TikTok and Instagram, where companies and creators grow audiences together but often don’t clearly agree on who owns what.

Financing the Intangibles

For many startups, brand equity is the only equity that matters. A recognizable name, a consistent tone, and a strong aesthetic can raise millions before a company ever turns a profit. These businesses are not frivolous, they’re just built on a different kind of asset. Their value comes from attention, emotion, and perception.

But that reality creates tension when it comes to financing. If Glossier or SKIMS tried to use their brand value as collateral, what would a lender even file on? A logo? A color palette? A million Instagram followers? The law doesn’t provide clear answers. That uncertainty makes investors cautious and founders vulnerable.

The Price of a Feeling

Valuing a brand is part art, part math, and mostly guesswork. Accounting standards like IFRS and GAAP treat goodwill as just a leftover number, whatever’s left after subtracting tangible assets from a company’s price. But that doesn’t capture what’s actually happening when someone buys a brand. They’re not paying for leftover value; they’re paying for trust, story, and emotion.

Brand valuation firms try to measure this through surveys, online engagement, and market performance, but those methods aren’t standardized. One firm might value Glossier’s brand at $1.8 billion based on social data, while another might cut that in half. Without legal or regulatory guidance, “brand value” is whatever someone convinces investors it is.

Why It Actually Matters

This isn’t a niche issue. It’s a growing economic gap. Startups are being funded on assets that the legal system doesn’t fully recognize, and that disconnect creates risk. Without legal recognition, brand value is difficult to protect, transfer, or even measure accurately.

Meanwhile, other countries are already experimenting. China’s IP-backed lending rose 57% last year as regulators encouraged businesses to use intangible assets to secure credit. In the UK, NatWest issued its first loan backed by intellectual property. The U.S. has not caught up. American lenders still treat goodwill as too abstract to touch, even as it drives most of modern business value.

What Comes Next

Getting the law up to speed with today’s economy does not mean rewriting it completely. It just means that recognizing "intangible" doesn’t mean "imaginary." Updating Article 9 to include things like brand goodwill, online presence, and social media assets would make financing less risky for both startups and lenders. And it would finally reflect where value actually lives in 2025.

Lawyers and lawmakers like clear categories, but business doesn’t fit inside those anymore. A startup can exist entirely online and still generate millions.

*The views expressed in this article do not represent the views of Santa Clara University.