Equiteq’s research reveals that only 1 in 25 consulting firms break through the growth Glass Ceilings to exceed revenues of $10m and only 1 in 100 consulting firms break through the $20m barrier. This is because owners aren’t equipped to handle the changes necessary at each Glass Ceiling stage. Watch this presentation to help you succeed in your objective to grow equity value and sell your consulting firm.

1. Confidential© Equiteq 2015 equiteq.com
Growing equity, realizing value
How can you smash the growth glass ceilings?

2. Confidential© Equiteq 2015 equiteq.com
Equiteq is the leading M&A firm focused exclusively on the
consulting sector
What we do for our clients Global presence and consulting industry credentials
2
Equity value realization
Sale to a Strategic Buyer or
Financial Investor
Sell
45+
Deals
Value creation and sale preparation
Between 1 and 5 years ahead of
a desired transaction
Prepare
300+
Clients
Why we’re different
• Deep domain expertise in the Consulting sector
• Add value and engage at any stage in the exit destination
journey
• Unique blend of consulting, corporate finance and investment
banking skills
NEW YORK
LONDON
SINGAPORE
Established in 2004 Regular AMCF USA speaker
35 people across 3 continents Regular MCA UK speaker
Clients in 27+ countries
Widely published in industry
media

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To what extent do you feel confident
of growing your firm in a smooth
trajectory at 10-20% p.a.?

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What are the 5 stages of growth and the
areas for focus at each stage?
Agenda
4
What’s the impact of glass ceilings on equity
values?
What are the crises that occur at each stage and
what can be done to plan ahead to mitigate the
chance of a plateau?

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Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
What are the 5 stages of growth in building a firm with equity
value?

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Percentage of firms that reach each stage
6
83% 12% 4%
1%
£5m £10m £20m

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Stage 1
7
Focus on
getting
your value
proposition
clear
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

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Stage 2
8
Focus on
scaling the
business
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

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Stage 3
9
Focus on
delegating
authority
to
individual
practices
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

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Stage 4
10
Focus on
coordination
of resources
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

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Stage 5
11
Focus on
collaboration
between
consulting
practices
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

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Developing
service
offerings & UVP
Stage 1
Summary: What are the 5 stages of growth and the areas for
focus at each stage?
12
Stage 2 Stage 3 Stage 4 Stage 5
Scaling the
Business
Delegating
authority
Co-ordinating
Resources
Collaboration
across Practices
Focus
area
Key Message: What you don’t focus on at each stage of growth will require you to circle
back later.
Reflection: If your financial growth, both historic and projected is not steady, where are
you stuck?

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2014 Buyers Research Report available to download from
Equiteq Edge on our Website
• M&A within professional services is very active and
growing
• There is limited aggregate information available on
why and how buyers of consulting firms behave
• We commissioned independent research:
– Overall demand trend
– Types of consulting firms in demand
– Deal sourcing preferences
– Deal structures
– Reasons that buyers fail to close
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The ideal consulting firm target is US based and approximately
$15-40m in Revenues
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• Geography: 50% buyers are very or extremely interested in the US (33% UK, 20% EU).
• Size: Revenue - on average, buyers looking for revenue of $15m to $40m.
65%
42%
27%
22%
13%
0%
10%
20%
30%
40%
50%
60%
70%
US UK Europe Asia S
America
$15m
$39m
$28m $28m
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
Low High
Range Mean
$m
Geographic preference for consulting firm acquisitions Size preference for consulting firm acquisitions

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Factors attracting buyers to and deterring buyers from
consulting firm acquisitions imply conflicting priorities
15
6.3
7.8
7.9
8.1
8.4
4.0 5.0 6.0 7.0 8.0
Tight geographical focus
Differentiated in its market
Unique and leveragable IP
Deep domain expertise in one
area
Financial stability
5.7
5.9
7.1
7.3
8.3
8.5
4.0 5.0 6.0 7.0 8.0
Wide geographical spread
Good growth, but no profits
High ratio of contracted staff
Good profits, but no growth
Diverse set of services
Cultural misalignment
Scale: 0.0 to 10.0.
10 – Strongly Attract; 0 – Not Attract at all.
Scale: 0.0 to 10.0.
10 – Completely Deter; 0 – Not Deter at all.
Factors attracting buyers to a consulting firm Factors deterring buyers from acquiring

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How do you create a smooth growth trajectory?
Market
Proposition
Intellectual
Property
Quality of
Fee Income
Sales &
Marketing
Process
Consultant
Loyalty
Client
Relationships
Sales &
Profit Growth
Management
Quality
Equity
Growth
Wheel

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Identify which levers are driving equity value up, and dragging
it down
Key
Market
Proposition
Intellectual
Property
Quality of
Fee Income
Sales &
Marketing
Process
Consultant
Loyalty
Client
Relationships
Sales &
Profit Growth
Management
Quality
Equity
Growth
Wheel
Driving value up
Dragging value
down

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Make sure you have a Unique Value Proposition (UVP) that fits
the current market environment
Market
Proposition
Intellectual
Property
Quality of
Fee Income
Sales &
Marketing
Process
Consultant
Loyalty
Client
Relationships
Sales &
Profit Growth
Management
Quality
Equity
Growth
Wheel
Strength of proposition & effectiveness in client sales, reasons
why we win & lose
Market positioning, uniqueness & focus
Differentiation from and understanding of competition
The importance to Buyers:
Buyers are attracted by a focused set of propositions that deliver
value into a clearly defined set of needs & hot issues. Such
propositions are easily understood and more importantly drive up
fee rates & volume
Key messages
• Firms with UVPs always survive best in difficult times
• Make sure you are part of the client business plan rather
than just a cost line in their P&L
• Ensure your offer includes an ROI and, if practical, share in
results
• Promote your expertise
Market Proposition lever is about:

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Revisiting your UVP - Identify the ‘hook’ on which to hang your
value proposition
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CONSULTING SKILLS
CONSULTING SOLUTIONS
UNIQUE VALUE
PROPOSITION
CONSULTING OFFER
VALUE
CREATION
VALUE
Example ‘hooks’
• Increased market share
• Earnings per share
• Profit growth
• Sales growth
• Cost reduction
• Working capital reduction
• Process improvement
• Staff Development
• IT Development
• Technical Skills

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Make sure your target audience is aware of your expertise and
invest in lead generation and sales
Market
Proposition
Intellectual
Property
Quality of
Fee Income
Sales &
Marketing
Process
Consultant
Loyalty
Client
Relationships
Sales &
Profit Growth
Management
Quality
Equity
Growth
Wheel
The method, process and spend on generating leads
The management, effectiveness and predictability of converting
leads into billed revenue
Clarity of communication using strongly branded web and
presentational materials delivering a proposition value message
to target clients
The importance to Buyers:
Consistent, predictable & effective sales conversion into targeted
client groups is at the core of any potential investor’s interest
Key Messages
• Sales and value growth will only happen if you make prospects
aware of your value and are persuasive in winning business
• Focus your services where you have a ‘right to win’
• Proactively drive, measure and manage sales performance
Sales & Marketing Process lever is about:

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“Their values have to fit with own otherwise we would
never make it work…”
“Culture is the key one….anyone who tells you they’ve
never had a deal go wrong because of culture is
probably lying to you”
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Buyers sometimes say they buy management teams first and
consulting firms second.
Market
Proposition
Intellectual
Property
Quality of
Fee Income
Sales &
Marketing
Process
Consultant
Loyalty
Client
Relationships
Sales &
Profit Growth
Management
Quality
Equity
Growth
Wheel
Impact on equity values

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Revisiting the impact of glass ceilings on equity values
Firms north of $15m are in greatest demand
Top 3 factors that strongly attract buyers to
consulting firms:
• Financial stability – both historic and projected
• Depth of domain expertise in one main service area,
as opposed to having a broad range of services
• Possession of IP that is unique and leveragable
Deal structures usually have a 50% earn out over 3
years
Requires a
management
team able to
navigate through
the stages of
growth

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Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Different stages encounter different types of crisis

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Stage 1: Mitigating the leadership crisis
24
Do more: Do less:
• Strengthen your
leadership from ‘doers’
to managing P&L
• Invest in an FD
• Use marketing to drive
leads
• Build deep domain
expertise
• Regarding every dollar
as having equal value
• Reacting instead of
generating client
demand
• Inconsistent project
controls

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Stage 2: Mitigating the autonomy crisis
25
Do more: Do less:
• Delegate with clear
guidelines (hiring,
investment, IP)
• Focus on strategic
accounts to create
enduring relationships
• Succession planning and
building a leadership
pipeline
• Knowledge transfer and
management
• Relying on the heroic
efforts the founders (the
business needs to be
able to run without
you!)
• Which undermines your
culture (e.g. failure to
train everyone,
rewarding mavericks)

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Stage 3: Mitigating the crisis of control
26
Do more: Do less:
• Create some form of
management committee
• Delegate specific issues
• Invest in HR and
Marketing leadership
• Stop thinking
everyone's’ domain
expertise lasts forever
• Thinking your IP
offerings remain current
(is it time to
create/retire some IP?)

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Stage 4: Mitigating the crisis of red tape and bureaucracy
27
Do more: Do less:
• Get admin support for
the leadership
• Ensure real time
visibility of major KPI’s
with integrated
dashboards
• Looking inwards
• Thinking of the business
planning process as an
empty ritual
• Getting dragged into
every policy meeting!

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Stage 5: Mitigating the crisis of talent
28
Do more: Do less:
• To create alignment
between strategic
planning, organisational
structure, leadership
development &
performance
management
• Unplanned investments
(services and/or
markets)
• Regarding culture as
intangible or un-
manageable

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Each stage of growth needs a different focus, and a different
crisis will present with the potential to cause a stall in growth.
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Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Focus area
Developing Service
Offerings
Scaling the
Business
Delegating
Authority
Co-ordinating
Resources
Collaboration
across Practices
Crises Founders Crisis Autonomy Control Red Tape Talent Mgmt.
Do more of Managing P&L
Building
leadership
pipeline
Get an
executive
committee and
delegate
accountability
Real time
visibility of
KPI’s
Create
alignment
between
strategic plan
and talent
mgmt.
Do less of
Regarding every
dollar of revenue
or profit as equal
Relying on the
efforts of the
founders
Thinking
domain
expertise has
an unlimited
lifespan
Looking
inwards
Non-strategic
investments

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Contact info@equiteq.com
More resources are available at www.equiteq.com/equiteq-edge
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31. Confidential© Equiteq 2015 equiteq.com
Growing equity, realizing value
UK +44 (0)203 651 0600
USA +1 (212) 256 1120
Singapore +65 6352 7482
Email info@equiteq.com
www.equiteq.com