At Sophon Capital Research, we look for businesses that can compound capital over the long term. Not all great companies are obvious at first glance, and not all metrics carry equal weight in identifying enduring competitive advantages. To make our analysis more systematic and comparable, we’ve developed the Sophon Score: a 100-point framework that evaluates a company across the 10 most important pillars of durable, high-return businesses.
The Sophon Score is designed to capture a mix of market opportunity, operational efficiency, competitive dynamics, revenue quality, and management alignment. Each company is scored on a 0–10 scale across ten consolidated categories, with the total summing to 100 points. The higher the score, the more a company demonstrates the attributes we believe lead to superior long-term compounding potential.
Below is the framework we use internally. It balances rigor with simplicity, consolidating overlapping factors into clear buckets while retaining the nuance necessary to differentiate great businesses from good ones.
The Sophon Score Framework (0–100)
The Sophon Score is our 100-point framework for evaluating a company’s long-term compounding potential. It consolidates 16 qualitative criteria into 10 key categories, each reflecting a critical attribute of durable, high-return businesses.
Sophon Score Categories
Market Opportunity – Low market saturation, large and expanding TAM
Competitive Advantage – High barriers to entry, cornered resources, counter-positioning
Margins & Leverage – Incremental margins, operating leverage, healthy FCF conversion
Reinvestment / Growth – Reinvestment opportunities, ability to increase share of wallet / cross-sell
Business Model Quality – Low capital intensity, favorable working capital dynamics
Revenue Quality – Recurring revenue, network effects
Pricing & Unit Economics – Pricing power, attractive unit economics (e.g. CAC < LTV)
Competitive Dynamics – Favorable competitive dynamics, bargaining power
Management – Skin in the game, owner-operator, track record, incentives/compensation
Financial Health – Reasonable leverage
Scoring per bucket:
0 = Very poor / absent
5 = Average / moderate
10 = Best-in-class / fully aligned
Company Score (0–100) = Sum of all 10 buckets