Our Story: A Mission to Bridge Consulting and Venture Capital

Category
Consulting, Venture
About This Project

When we founded Archetype Solutions Group and worked to refine our business model, we did it with the same energy that we bring to all our partners. We analyzed what was happening in the middle market consulting industry, looked at our key assets and IP, and wiped away all ideas of the status quo to uncover how we could redefine the traditional consulting business model.

 

What we realized was that the traditional consulting model left a tremendous amount of opportunities on the table by being unwilling to risk one key thing – capital. The drive to keep top talent meant that traditional consulting firms channeled their margins into salaries and bonuses, but this also meant that there was a ceiling to the type of returns the firms and their employees could see.

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“So, you want to be a venture capital firm?” No. The traditional consulting model wasn’t the only business model we had a hard time seeing applied to Archetype. Venture capital (VC) firms raise pools of capital to invest in private companies with the intent of increasing value over time and selling at a profit. The business model of VC firms is, by design, intended to keep costs low. They make money based on return on capital. This discourages the kind of costs that come with having in-house consulting capability and capacity to support their ventures.

 

What we’ve built at Archetype is a model that takes our best assets – our ecosystem of partner relationships, proven frameworks, industry expertise and a world-class team – and applies them to our ventures to reduce capital risk and generate outsized returns on investment.

 

Our Unique Value: a business model where consulting partners feed venture opportunities, which in turn creates value for our consulting partners

 

 

Our business model in four bullet points:

  • Archetype’s management consulting offering accelerates revenue growth and innovation for mid-market companies
  • Helping these companies grow also identifies opportunities for venture investments
  • The access to Archetype’s team expertise and our mid-market partners’ channels to market accelerates the ventures’ growth
  • Equity in Archetype’s venture fund – Arc Alpha – provides our mid-market consulting partners alternative and outsize returns

Where and how we compete

 

Here at Archetype we focus on fiercely independent, mid-market companies in the workplace health, wealth, and performance industries. Mid-market enterprises often struggle to innovate and grow due to a limited supply of time and human capital.

 

By filling that gap with our team’s expertise and our ecosystem of partners, we’ve been able to generate a 10:1 ROI for our consulting partners. However, the consulting agreement is just the beginning of our relationship with our consulting partners.

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At Archetype, we view our consulting clients as partners for a reason. Our consulting partners are brought into our venture fund without the requirement of a financial investment as advisors and work with us to unlock the value of our venture opportunities.

 

Archetype uncovers investment opportunities throughout our consulting engagements. Our immersion in our consulting partner’s industry unearths early-stage companies not yet discovered by traditional venture capital firms. Once we invest in an opportunity, our ventures have their capabilities amplified and growth accelerated by leveraging Archetype’s consulting expertise and capital (via the Arc Alpha fund).

 

By accessing our ecosystem’s distribution channels and connecting ventures to our partners, we de-risk investments and target a 30% IRR floor. To date, we have invested in 10+ ventures in the workplace health, wealth, and performance industries. Our investments have validated market demand, existing customer bases, and established revenue.

 

 

Our Not-So-Hidden Weapon: an expansive, powerful, and engaged ecosystem focused on workplace health, wealth, and performance

 

 

A key strategic choice we made when defining Archetype was our investment in and dedication to growing our ecosystem. Archetype has achieved an unparalleled competitive advantage through our network of partnership firms and individuals. Collectively they bring market access and expertise that no partner could develop alone – with each ecosystem member acting as a “force multiplier” for the others.

 

This ecosystem is centered on the workplace health, wealth and performance market segments. We have deep organizational and individual expertise across these segments both within Archetype and in our population of advisers – which includes current and former CEOs and CXOs of firms from the space.

 

Our expertise in working with and through different distribution networks in these market segments has improved go-to-market strategy and accelerated revenue growth for both our consulting partners and venture investments.

 

We specialize in bringing agile innovation to enterprises both in the middle market (consulting partners) and to early-stage and growth companies (venture investments).

 

We drive rapid growth through the deployment of our functional expertise in strategy, product development, sales marketing development, software development, and finance. Underlying all our functional areas is a data-driven approach to decision making and a focus on optimizing operations when building processes and executing deliverables.

 

Case Study

 

A leading healthcare benefits firm had a dysfunctional technology team, an ailing commissions system, and had an operations team that was reactive rather than proactive. Archetype was brought in to revamp processes, streamline operations, and develop efficiency gains in overall productivity.

 

Our team discovered that operational inefficiencies were not just stagnating growth but also putting financial pressure on the consulting partner to make substantial operational changes. Additionally, gaps in technology were resulting in time consuming and expensive manual processes.

 

Our Consulting Results

 

Archetype helped the consulting partner become a technology leader, leading the building process for an internal development team and transitioning ownership of IT related projects back to the partner. IT function differentiated the partner in the marketplace and significantly improved their ability to support clients and develop new revenue streams.

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Sales effort utilizing the new technologies and strategies resulted in $500,000 of carrier bonuses and our operational efficiency initiatives delivered several millions in cost savings.

 

Our Venture Value

 

While working with the consulting partner, we were able to identify a venture opportunity whose product solved a chronic pain point for clients of the healthcare benefits firm.

 

Utilizing the in-depth market expertise we had gained throughout our consulting engagement, we were able to arm the venture company with a team of functional experts to develop and execute a growth strategy centered around rapid prototyping of key features demanded by the market.

 

Our ecosystem connections additionally facilitated partnership agreements, giving the venture company access to distribution channels previously closed to them – including creating a channel partnership with the healthcare benefits firm who will see a return on investment as partners in the venture fund.

 

A values-driven organization ready to accelerate your growth

 

As unique as our business model is, how we live our company values to consistently achieve success is just as unique. We live our values every day. It’s how we solve complex problems, execute high-quality strategy, show up for teammates and partners, and build a culture of excellence. Start a conversation with us today to see for yourself how our team, ecosystem, and values can help you achieve your goals.

About the author:

Chetan founded Archetype with the aim of injecting nimbleness and enterprise scalabilities in mid-market enterprise. He has a strong track record in business strategy and innovation from incubation to acquisition. Prior to his entrepreneurial endeavors, Chetan worked at ZS Associates, developing analytics solutions for pharmaceutical companies, then moved to Meritum Partners as a Director where he led forecasting, incentive compensation, sales force design, and pipeline strategy initiatives.

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