Spotlight on Matthew Lee
Here at Spotlight, we had the chance to talk with Matthew Lee, Managing Director of Bespoke M&A. He told us about how he has overcome setbacks within his career and spoke about the lessons he has learnt along the way.
I am a chartered accountant by background (ACA ICAEW) having initially started my career at PwC on their graduate scheme as an auditor. I then joined Catalyst Corporate Finance as an advisor to support businesses looking to acquire, raise finance, or realise shareholder value from an exit. Catalyst was subsequently acquired by a listed investment bank called Alantra who I continued to work for as a corporate finance advisor before setting up my business – Bespoke M&A.
The corporate finance industry is very traditional and rarely innovates, which made me think there must be a better way of doing things. This was further highlighted by many firms focusing on larger deals and outsourcing much of the detailed work involved in deals. Bespoke M&A was set up to do things differently and add much more value than the traditional firms. We offer four key services which are focused on the elements that occur in most deals. These services are vendor assist, financial modelling, tax, and corporate finance.
Our vendor assist is a flexible service designed to get into the detail of a firm’s financials. For instance, by using technology like Power BI to analyse large amounts of data, finding additional profit add-backs, fixing accounting issues, or creating carve out financials. Our modelling division creates bespoke tools for businesses to analyse their strategy, present investment cases to investors, support finance raises, or set budgets. Our tax service supports before, during, and after deals. For instance, helping with areas such as share incentive schemes, company restructures tax papers, and high net worth tax planning. Our corporate finance division draws on all these services, under one engagement, to provide high-quality advice underpinned by a level of detail that no one else can provide. Deals are high risk in that if issues pop up, the price will likely be impacted and worse still the deal may not happen. Many underestimate the level of work and preparation that is required to complete a successful deal, which often results in failed processes. Our unique offering minimises risk and maximises value, and this has been key to our success - as we truly add value to our clients.
The onset of the Covid pandemic just six months into setting up the business was a big challenge. We were growing exceptionally fast but during April 2020 the world virtually stopped, projects we had lined up were cancelled and the pipeline looked quite slim.
I had ensured that we built up a significant cash balance in the good times as I know sometimes cash flow can be lumpy, particularly with a new business (I did not expect a pandemic mind). As a rule of thumb, I try to ensure we can cover our costs for the next six months as a minimum. I believe that if you can make business decisions for the right reasons and not because you are constrained by cash then it will always work out in the end. This certainly took the pressure off in this case.
Luckily, we had a large project signed up which protected cash flow for at least the next couple of months. This coupled with our cash reserves meant we were safe for many months to come. I then refocused my time to explore other avenues like how we could support the restructuring market rather than the deals market, so we could be countercyclical. This meant that after the project was complete, we would have had a backup route if the deals market did not come back. By June though, the deals market was as strong as ever and we did not need to go further down the backup route. It is helpful to know we have an additional market we can explore and that we have a cyclical hedge if we ever need it.
When facing challenges I try to keep a calm head and take the time to think things through. I have learnt that you do not need to make snap decisions or give snap reactions, particularly when the decisions are important – there is always more time to make decisions than many think.
What is an important initiative that you feel passionate about in your role?
Treating employees well, continually training them, and providing them with flexibility when they need it. This includes recruiting as we grow so employees are not overworked, allowing employees flexibility in working hours, and the ability to work from home. We did this from day one so when the pandemic struck, we were fortunate enough to already be set up for remote working. But more importantly, I see this as a common-sense approach that costs nothing, but in return makes everyone’s lives better. The M&A industry is very traditional, and I know lots of examples of employees being chained to desks, overworked, and not given the training they need which has led to them being pushed out of their role.
The biggest lesson that you’ve learnt along the way
To believe in yourself, it is surprising the doors that open when you set out on your own. There are relationships I have now that I could not have had while I was at my prior firms – as why would those individuals talk to me rather than a more senior colleague at my prior firm.
Tips to those starting their careers
I think it is a good idea to get on a broad graduate scheme, as that gives you time to think about what you want to specialise in. Coming out of university, it is almost impossible to know what you want to do, and you likely will not understand many of the roles that exist in your chosen field. Being able to get a qualification as part of your graduate scheme is very valuable as you will always have it to fall back on.
For instance, the graduate scheme at PwC allowed me to work with numerous businesses, big and small, across many sectors. It also gave me the opportunity to see all the roles within those firms. I was able to become a chartered accountant, and this has been invaluable to my career. My qualification has always been a nice fallback option, as I knew it would enable me to access a large number of roles if I ever needed it. For example, if the new business venture had not worked when I first started, I would have had job options.
Advice to people who are wanting to start a business
Fully understand your USPs and why people would use your business. Know who is going to buy from you and understand how you will get to them to convey your USPs. If you can focus on higher-value, lower volume business – you will have to do much less selling. Above all though you will need credibility (in my case experience and my ACA) and to be personable – people want to work with people they like, price is often not the key factor. I would also recommend bouncing your idea of people in your field, if possible, to gauge interest and what adjustments you could make to improve.
Advice for people aiming for leadership positions
Be a good listener, observer, and reflect on yourself and what you see. You will be surprised at what you learn and often this can result in finding solutions to problems, be that a new product, strategy, or cultural changes.
The best part of your job and worst part of your job
The best part is seeing the difference our work makes to a client. Some of the most satisfying times are when you help shareholders exit a business and you help them realise the best possible value for it - it is always a life-changing moment for them. However, the admin is the worst, it is easy to forget that you are the accountant, HR, IT, marketing, operations, legal, plus your day job.
We are continuing to quickly expand the business and are focusing on building our corporate finance pipeline. We are always looking at what new technology and systems we can use to continue improving the quality of our offering.