Management Consulting Firms Analysis

Goals

To compare pricing of management consulting firms/consultants offering services to early-stage, seed stage, and Series A funding stage companies to inform the client's pricing strategies.

Early Findings

Cost Analysis

  • Costs for fundraising consultants (for corporate funding) “are fairly visible in real time – they are capped by the number of hours (or some other measure of work), and they tend to be lower in absolute dollar terms than success fees.” That said, consultant costs can be much higher (up to about 3x higher at the outside) than it would cost to hire a traditional full-time employee for the same work.
  • Notably, companies should expect to have to pay for the consultant’s onboarding time, wherein the consultant learns about “the company’s history, culture, and management working style,” which is considered “unproductive” time. Compensation for these consultants is typically done by unit of time (by the hour, day, week, or month), with specific baseline thresholds in place (regardless of actual time commitment).
  • Hourly rates vary by competitor, and are based on “their experience, track record, and overall availability, as well as their location). These range from $30 (at the very lowest) to $150 (or more) per hour. If a weekly or monthly rate is in place, this is “tied to hourly rates through enforcement of a minimum number of hours.”
  • The most expensive consultants and consulting companies have charged upwards of $50,000/month for individual consulting fees (which works out to be over $300/hour), though this is very rare.
  • Additionally, milestone bonuses can be worked into the contract, ensuring that lawful compensation-for-success-events regulations are followed.

Upwork Venture Capital Consultants Cost Comparison

  • A review of the 27 US-based venture capital consultants listed on Upwork showed quite a range for their hourly rates. The lowest rate (one consultant) was $45/hr, three consultants charged $50/hr, one charged $55/hr, one charged $60/hr, one charged $69/hr, one charged $70/hr, one charged $75/hr, one charged $80/hr, one charged $85/hr, two charged $100/hr, two charged $120/hr, six charged $125/hr, one charged $149/hr, two charged $150/hr, one charged $170/hr, one charged $175/hr, and one charged $195/hr. The average of these would equal $105/hr.
  • Of these, those with the highest number of successfully-completed jobs charge as follows: $69/hr (247 jobs), $120/hr (215 jobs), and $125/hr (202 jobs). They were located in Ocala, Florida, Garden City, New York, and Jacksonville, Florida respectively.

A Look into Pricing

  • Most consulting firms and individual consultants require contact with one of the company’s sales team to identify pricing of any kind. Invisionate, for example, is the top-ranked venture capital consulting firm on Google, but it does not outline any kind of pricing, per-hour, per-consultant, nothing. Simon-Kucher, a large international firm, also does not list any pricing, and interested parties must contact one of their team to discuss this. [s5]
  • Some information on pricing is available, however, from some firms, like Tiburon Advisors, for example. Although they do not give their per-hour or per-consultant fees, they note that typical projects (which take two to three months) cost between $75,000 and $250,000, depending on the range of services and length of contract. They also note that they bill separately for additional office expenses and travel expenses. They bill projects at two points – mid-point and upon completion of services (30 days to pay).

Proprietary Database Search

  • In addition to this public search, we scanned our proprietary research database of over 1 million sources and were unable to find any specific research reports that addressed your goals.

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