A Year of Transition – The Deal Team 2018 (a client’s learnings)

Two years ago, I launched the first professional transaction management consultancy from an iPad, sitting in a café in London. I had nothing but a contact book from 20+ years in investment banking, and a couple of potentially interested clients.

It’s been a successful second year. The client delivery, price point and origination strategy were tested across multiple situations. The business is cashflow positive. The growth strategy is clear.

Also, a hard second year. I worked on client executions from November 2017 to October 2018. All the while, seeking to produce relevant content and commentary, actively marketing, and following potential leads. And, I realised in early 2018 that focusing solely on equity transactions was going to limit potential growth, due to the uncertain pipeline and high execution risk of mid- to high-value ECM deals in Europe. So, I also had to decide, plan and execute on a new direction for the business.

Like I said a year ago: there are no real secrets. There is lots of hard work. And there are plenty of opportunities to fail. Other business owners will have had different journeys. So, all I can offer up is what has been business critical to me this year.

1. Be aware that 42% of startups cite “no market need” for their failure. Our initial focus was on equity transactions. However as we discussed in “What are the Equity Markets For?” in March this year, there are fundamental concerns about primary equity dealflow. Even if our services are potentially of interest to 10% of target equity transactions in EMEA – that results in an addressable market of single digit deals a year. Not enough to sustain a standalone consultant, let alone the business I wanted to build longer term.
2. Be ready to pivot. I viewed this information as a positive nudge, not a deal breaker. I was also aware that keeping myself at the centre of the business was a critically limiting factor. I therefore pivoted the business in two directions. First, to add M&A to our capability, addressing a market that executes hundreds if not thousands of deals a year. Second, to package the lessons learnt and infrastructure built over the previous two years, into a win-win origination and execution platform for external consultants – other ex-professionals unwilling to go back into banking, wondering what to do with their contacts and deal skills, and wanting some work-life balance for the first time in their careers. These two pivots led to the relaunch of our business as The Deal Team.
3. Know where you are going, and the foundations needed to get there. Invest in your important issues while they are not yet urgent. Create a bottom-up five year plan, both financial and operational. Keep a close watch on progress. Plan forwards to document processes and conduct hiring plans, which you can then implement before they are critical. Identify the roles required in your organisation, the ideal time for each to be in place, and consider how roles could be combined early on. Consider part time positions, not just for cashflow but because you may in fact not need full time people. And part time = potentially better qualified hires who value the flexibility.
4.  Professionalism requires teamwork. Thinking you can do everything by yourself is a death-trap for the business. So is hiring too many people and running out of cash before delivering. I outsourced everything I could. I hired a business coach to guide and challenge me on transforming a self employed consultancy into a real business. A branding and communications consultant to test my business model, the offering to clients and consultants, and execute on new website, brochure, corporate materials and corporate video. An IT contractor to run our hardware and software to the high levels of security necessary for the strategic transactions we carry out. A legal advisor to build the consultant contractual relationship, make sure it ties in with the client engagement letter, and be aware long term of our needs as a small business. And external bookkeeping services, with everything they need running through the cloud.
5. Bootstrap your business financing if you can. We’re lucky to be a high impact/low headcount services business, with little to no need for assets, full time employees, or even a fixed address up until now. I use a WeWork hotdesk, which gives me a home office as well as access to professional meeting rooms in most major cities around the world. All our corporate, origination and transactional information is in the cloud, with no need for expensive office space. Our corporate materials are designed to be printable on home inkjet printers, and bound by hand if necessary. We use low or zero cost communications with clients and consultants (hello, Zoom and WhatsApp). So most of the first two years’ revenue has been retained in the business, helping to reassure potential clients and consultants that we are here for the long term.
6. Take care of yourself. Growing a business is a marathon, not a sprint, and it’s hard. Hard on your time, on your relationships, and on your emotional state. I will own up to having days – even a few weeks – of low motivation in 2018. What makes this especially dangerous, is that apparently the top thing failed startups have in common is a sole founder without a co-owner. This is where the support structure you create, both personal and professional, is vital to your personal wellbeing and motivation and therefore to the business. I use my business coach to keep tabs on progress, identify everything that can be outsourced or hired in, keep for myself only those topics that I truly enjoy, and schedule time for self care. Exercise, holidays, hobbies, time with the family – whatever is needed to remind you what you are working for and to keep you excited about the business.

Our clients and consultants put their trust in us. So, we are delighted to enter our third year with even more abilities, drive and resources to support our consultants, and give our client management teams back their time to run their businesses and still execute their strategic transactions to the highest level. I look forward to working with even more of you in 2019!