With research showing that 70-90% of M&As fail even during favourable economic conditions, expert advisors have become even more critical in helping deals get over the line in the current climate. One advisor who has begun to make waves in the M&A market – with the combined valuation of her engagements over the past three years amounting to $500m – is CEO and Founder of business advisory firm, Trachet, Claire Trachet.

Companies trying to succeed in the current climate are faced with extremely challenging conditions fueled by the war in Ukraine, soaring inflation, interest rate hikes and the wider cost of living crisis. A culmination of all these factors has created an economic fog which has brought uncertainty to the markets and evoked cautionary behavior for investors weary of a recession.

Early and mid-stage businesses and startups, particularly those looking to conduct a fundraising round or an M&A to help fuel growth, should be well-armed before embarking on either journey in the current economic climate. Companies must take steps to ensure they raise capital in terms that don’t harm their future options, whilst trying to navigate the uncertainty of the negotiating process being at a disadvantage with people who make deals every day.

Claire Trachet set up Trachet as a hands-on boutique advisory in 2016 following both a successful career in corporate finance and as an award-winning entrepreneur with the mission of helping others accelerate growth. By taking on a smaller advisory firm, founders are weighting the odds in their favour, as all of the advisor’s resource is likely going to be geared towards that one M&A. Choosing the right partner to guide you through the process is one of the most important parts of getting a deal over the line, yet a culture fit between firm and matchmaker is often overlooked.

In the six years since the firm’s inception, it has now amassed an impressive track-record across a wide array of global sectors, including DeepTech, Cybersecurity, CleanTech, TravelTech, FinTech, EdTech, SaaS, marketplaces, as well as Chemicals, Infrastructure, CPG, Healthcare and Natural Resources. Today, Trachet is a trusted advisor supporting companies with everything from business development to exit strategies. The firm helps clients from the ground up, stepping-in or advising C-level management on opportunity analysis and transaction execution.

Claire Trachet, founder of Trachet, comments on the crucial need for an advisor when conducting a deal in today’s economic climate:

“I always stress to my clients the importance of being deal ready before heading into any potential transaction. The buyer has shown an interest in your firm at a particular moment in time, but a simple change in external market conditions could lead to them getting cold feet and pulling out. What that means is you need to have done all the necessary preparation before negotiations have started, to ensure the deal gets over the line quickly and smoothly.

“Unfortunately for many entrepreneurs looking to secure a deal in the current investment climate, the outcome can be a poorly structured agreement. During the crucial fundraising cycle, I’ve seen founders surrender nearly half of their time and productive energy attempting to raise capital.

“The process is draining and could last for several months as potential investors undertake in the “due diligence” process. Getting a ‘yes’ can easily take six months and the ‘no’ could be longer than that. In the meantime, the emotional and physical drain can leave the business neglected, with more cash flowing out than in. Many early-stage companies have gone bust in pursuit of their next growth phase. If an attempt to raise capital ultimately fails, as has happened throughout the industry currently, it becomes hard to re-establish morale and causes key people to leave, the effects of which have crippled many businesses.

“My advice is always to get an experienced advisor to help in the technical domain of an M&A, as well as the emotional. Having someone beside you who can guide and raise any red flags will ultimately help save the organization significant resources.”

Speaking on her own experience as a founder, helping entrepreneurs accelerate growth, Trachet added:

“I’m really proud of how the company has grown over the past six years, especially amidst challenging times such as the pandemic and economic slowdown. I believe the best way to create value to the highest extent for clients is by putting people first and leaning on that trust to go through the highs and the lows of the transactions.

“After embarking on my entrepreneurial journey, friends and acquaintances continuously turned to me for guidance and counsel, ranging from simple transactions to some very complex operations. I began to understand how limited the access to appropriate counsel was for many start-up founders with established businesses.

“Following the transaction we facilitated for Dathena, we’ve also received interest from companies and their investors, curious to understand options developing for startups post Series A and B. We work across sectors in technology, with historical clients and new ones trusting us in critical phases in their development, whether financing rounds or bolstering their foundations through accelerated growth. We will also continue our Pro-Bono programme, with a call for applications opening soon.”