M&A startup case study

The client

A brand new firm, 3 professional’s, based in California, focused on distressed middle market transactions regionally.

The catalyst

The founders of this newly created M&A firm actually reached out to our team before finalizing launch. Coming from a larger firm, the partners were used to a certain level of support and information access. While developing their ‘go to market strategy’ they quickly realized that trying to wear all needed hats during the launch of a new brand was simply not possible.

Considered solutions

  • Internal analyst hire carrying an approximate cost of $70K annually.
  • Part-time or project-based analyst support purchased through previous working relationships. This would require for the firm to purchase data sources and grant access to third parties. Labor cost alone was estimated at $30k per year.
  • Buy at least one enterprise-level database for a minimum of one year with an estimated cost of nearly $20k per year.
  • Work with CAPTARGET, committing month to month to a dedicated analyst service, which came with the needed data to be productive.

Adopted solution

The firm chose to work with the CAPTARGET analyst team, initially for a 30-day test. Committing to a single analyst at a $2500 per month price point, they used the resources to help kick-start the firm. The analyst supported the development of many functional templates (CIM, recast, comparables, one-pagers etc.) and generally worked hand in hand with the client to ensure the firm was prepared to service its own clients.

After the initial test period, the client continues to work with the CAPTARGET team, now at an accelerated level. The analyst supports much of the day-to-day data and deal prep needs and is involved on an ad hoc basis in the development of long-form pitch materials and financial models. The firm maintains a 30-day subscription basis, effectively eliminating all fixed costs associated with research.

Net impact:

  • Total cost of $30k per year including labor and data
  • Long-term contractual obligations completely avoided
  • Available additional capacity during times of increased need without structural changes to fulfillment processes

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private equity consulting