Germany and Its Self-Employed: While there were just over 1.1 million people working in the self-employed sector in Germany in 2010, that number stands at just over 1.4 million in 2022—and the trend is upward.
In the U.S., forecasts predict that the number of freelancers will grow from 50 million today to just over 90 million by 2028.
Now, freelance professions and freelancers aren’t always one and the same—but the trend is clear: More and more employees are seeking a path to self-employment, outside of rigid structures.
Freelancers in M&A—a sign of the times
The trend toward self-employment is also evident in the M&A market. To many market participants, this may sound paradoxical at first—after all, M&A is a traditionally relationship-driven business.
But as in other industries, such as software development, the trend on the client side is clear. Whereas ten years ago, decisions were still based on personal recommendations, even complex consulting projects are increasingly being put out to bid online today.
Markets around the world are becoming digitized and globalized. This development does not stop at the consulting business. Business deals that were forged years ago on the proverbial golf course now more often begin on Google or LinkedIn.
The Digital Transformation of M&A Boutiques
The sale of a company does not follow the same market dynamics as regular consumer spending. Trust is the currency, and that is not going to change.
Nevertheless, the market environment has also changed in M&A. Hundreds of tool providers have eroded the dominance of traditional players. Information and buyer data can now be quickly obtained through software databases.
Advisors must increasingly differentiate themselves through process and industry expertise. The headwinds are growing ever stronger for traditional M&A generalists.
M&A Boutiques in the “War for Talent”
And it is precisely this trend toward specialization that is also fueling the M&A freelance business. Whereas years ago it was common for senior investment banking professionals to launch their own boutique as an exit strategy, today this step is often skipped in favor of freelance work or starting a company.
The reason for this is simple. Running a boutique firm means fixed costs and staffing headaches. Even M&A boutiques are not immune to the war for talent. This makes freelancing an attractive alternative.
So, on the one hand, we’re seeing the emergence of a freelance scene for M&A advisors, and on the other, an increasingly challenging market environment for boutiques. But what does this mean for the client?
Freelancer or boutique—what’s the best choice for the client?
Working with M&A boutiques requires that the company has opted for a structured sale process. The strict contractual framework and the exclusive engagement with a standard retainer underscore the client’s clear intent to sell.
Established, traditional M&A boutiques demonstrate their strengths particularly in providing personalized client support and guiding the M&A process with precision. Business owners who have never had any experience with corporate transactions or external investors will feel especially well taken care of.
Working with freelancers is particularly well-suited for companies that want to be actively involved in the process. As an integral part of the company—even before the actual M&A process begins—an M&A freelancer can contribute to the success of the transaction by assisting with preparatory measures, such as exit readiness and structuring the necessary documents for the data room. Industry-specific knowledge, combined with an established network in the market, enables early market and feasibility testing to obtain initial feedback quickly and cost-effectively.
Digital platforms, such as Fintalent.io, also enable individual M&A freelancers to assemble their own teams. Many former senior professionals from established investment banks and consulting firms are now active in the market through such “neo-M&A boutiques”—and the trend is rising sharply. This makes it possible to cover a wide range of traditional M&A processes—from exit planning and preparation, through active buyer searches in the market, to end-to-end deal support.
Outlook
M&A advisors are more comparable today than ever before. That’s why the trend toward a more flexible labor market isn’t stopping at the consulting industry—especially in the wake of the pandemic. In the age of tools and online databases, it’s becoming clearer than ever that high-quality consulting services don’t have to depend on a well-known brand.
