Fat profits and innovative technology drive approximately $350 million of venture investment into the sector during 2021.
After years of soaring growth and hefty profits, the discrete expert network industry is suddenly one of the hottest sectors for venture capital investment. Rapid industry growth, fat profit margins and a handful of noteworthy liquidity events are enabling a number of technology-focused upstarts to amass significant war chests.
What are expert networks?
Expert networks facilitate deep and rapid research into a company, product or market by connecting their clients – mostly investment managers and management consulting firms – to ‘experts’ with significant and current knowledge of the research subject. Expert network consulting is frequently used to shape investment decisions, conduct due diligence or set strategy recommendations.
The experts are usually former employees, customers, competitors or key influencers (such as doctors or former government officials) of the research topic. The typical consulting project is a one hour call between the expert and the client, where the client will want to rapidly download the facts on the ground from people who know the company best.
Many firms charge clients $1,000 or more to facilitate these consulting calls, with experts often earning hourly rates that can regularly exceed $500. Many firms also regularly coordinate paid business surveys for clients. (If you’ve spent much time on LinkedIn, you’ve probably been approached to participate in a paid consulting opportunity with an expert network company.)
The expert network industry was born in the late 90’s, with pioneers GLG and Primary Insights taking advantage of an SEC crackdown on the sell-side research practices of invest banks, following a number of scandals. The firms grew rapidly by directly connecting investors with executives with firsthand knowledge of the companies that they were considering investing in. However, the young expert networks soon found themselves at the center of several major insider trading trials and making unwanted headlines of their own.
While these high-profile cases seemed likely to kill off the industry, it instead responded by building large compliance teams tasked with implementing more rigorous compliance policies and monitoring for clients. Compliance became a feature to sell to clients (and help justify sky-high pricing).
The industry returned to steep growth over the next decade, with over 100 new firms sprouting around the world. It remained mostly out of the public eye, with a just a handful of early stage venture capital investments or late stage private equity deals — until the dealmaking floodgates opened at the start of this year:
A dozen firms reported approximately $350 million in venture capital investment this year:
A number of technology-focused firms, looking to replace armies of young recruiters with artificial intelligence-powered software, brought in additional capital, including proSapient ($10 million), NewtonX ($32 million), techspert.io ($12 million), and Enquire AI ($5.5 million).
So what’s driving the sharp increase in venture capital dealmaking?
Most of the capital investment went to firms developing technology to better identify and source new experts and streamline the process of matching experts to client’s project criteria. This should enable firms to scale without hiring armies of recent college grads to endlessly scour LinkedIn for qualified profiles. Several firms are also shifting towards self-service marketplaces for clients to select and staff experts on their projects at a fraction of the cost of traditional expert networks.
While a new firm seems to now be born every week – many of them touting more competitive pricing – the industry remains enormously profitable. Many firms still charge $1,000 per hour or more to speak with an expert. GLG, the largest firm in the industry, revealed eye-popping 73% gross margins in its recent S-1 filing.
While most firms in the industry have long been closely held, several firms established a path to liquidity in 2021. GLG recently filed for an IPO, where it expects to raise $100 million, and Capvision has also filed to go public on the Hong Kong stock exchange in early 2022. VisasQ debuted on the Tokyo Stock Exchange in 2020 and recently acquired industry stalwart Coleman Research for $102 million, perhaps kicking off a long awaited bout of industry consolidation.
Have you been contacted by an associate from Tegus inviting you to participate in paid consultation request? Wondering what’s involved, how much you can earn, or if this is a legitimate opportunity or a scam? Our comprehensive Tegus review will show you what to expect and how to land high-paying projects.
What is Tegus?
Tegus is an expert network, a type of firm that recruits and connects subject matter experts with clients doing deep research on a product, company or market. These experts are sourced from countless industries and at all levels of experience. They are typically former employees, customers, competitors, or key influencers of the business that the client is researching.
Tegus’s typical consulting project is a 45 – 60 minute call between the client and the expert, where the client wants to rapidly learn the ‘facts on the ground’ from people with significant hands-on experience. Working with expert network consulting with firms like Tegus can be an attractive source of extra income, since the firm offers high hourly rates, schedules calls at times that are convenient to the consultant, and projects are usually extremely concise with no preparation or follow up required.
While some expert networks have a broader client focus, Tegus works exclusively with investors, such as hedge fund and mutual fund managers, and venture capitalists. Tegus claims to have facilitated over 20,000 client calls on its website, and is currently arranging more than 900 each month. In an unusual twist on the expert network model, transcripts of most Tegus client calls are made available to its entire client base.
Tegus was founded in 2016 by Michael Elnick, a former AlphaSights associate, and his brother Thomas Elnick; the two serve as Co-Founders and Co-CEOs. The company raised a $90 million Series B funding round led by Oberndorf Enterprises and Willoughby Capital in November 2021 and $1.5 million in venture capital investment in 2017. In late 2021, the company acquired acquire BamSEC, a platform that makes it easy to access and work with SEC filings and earnings transcripts.
Tegus is based in Chicago, with a European office in Waterford, Ireland. The company has over 300 employees to service its more than 1,000 clients.
Is Tegus legitimate — or a scam?
A Tegus consulting request can sound too good to be true. A stranger reaches out to you on the Internet – often via LinkedIn – praising your expertise and offering to pay you hundreds of dollars an hour for simply having a brief phone call with their client.
While you should always be cautious about people reaching out with unsolicited offers (Tegus will never ask you for payment to participate in consulting projects!), Tegus is not a scam. It’s part of the rapidly growing expert network industry that encompasses nearly 200 firms around the world which are collectively soaring past $2 billion in annual revenue. If you’re looking for a way to leverage your experience and expertise, an invitation to work with Tegus may be your entryway to the easy and lucrative world of expert network consulting.
What to expect if you consult with Tegus
Tegus employs a small army of recruiters who spend their days searching for experts who fit the criteria for client project requests. LinkedIn is their favorite hunting ground, so if your profile seems to match what they’re looking for, they’ll often reach out via LinkedIn messenger, email or a phone call to introduce you to Tegus and provide a brief overview of the consulting opportunity.
If you’re interested and look like a fit, you’ll be asked to create a profile on the Tegus platform and answer a few short screening questions about your qualifications for the project, which generally requires a few sentences about your relevant work experience knowledge of and relationship to the subject of the call. You’ll also be asked a few yes/no compliance questions to ensure that you are permitted to speak about this topic and meet the compliance requirements set by both Tegus and the client. You’ll then have the opportunity to set your Tegus hourly rate (more on that in a moment!) and provide a list of times for a client call that are convenient for you. Getting set up with Tegus should only take 20 – 30 minutes of your time, and then you’ll only need a few minutes to respond to additional consulting project invitations in the future.
The Tegus associate will then present your profile, screening answers, rate and availability to the client. If they’d like to speak with you, the associate will send out a calendar invite for the call. From initial contact to client call often takes less than one week. Don’t get discouraged if you’re not selected for the first project that you apply for – landing about 1/3 of the relevant projects that you respond to is typical with expert networks. Refining your profile and answers to screening projects can help improve your success rate.
Tegus has an unusual business and pricing model for its clients. For most calls, the client just pays a $75 markup on the expert’s consulting fee; this compares to rates of $1,000 or more for a consulting call at firms like GLG. This fee includes sourcing and managing the expert, compliance checks and monitoring, and recording and transcription.
Tegus earns most of its revenue by selling access to its platform, that includes a rapidly growing library of over 20,000 client call transcripts. Approximately two weeks after your call, the transcript will be published and available to all Tegus clients on its platform. (Access to the platform starts at roughly $20,000 per year so transcripts are not shared publicly!) Your employment history and bio will be included in the transcript, but your name will be redacted. You do not receive any additional compensation for other clients accessing the transcript of your call. (Arbolus and proSapient offer clients access to similar transcript libraries, also without additional compensation to the expert, while Stream by Mosaic has an even less attractive compensation model for some calls – $0.)
Tegus Hourly Rates
How much should I ask for? How much can I ask for?
Expert networks like Tegus often pique your interest by touting hourly rates in the hundreds of dollars or more, and the ability for you to name your own price. Some in-demand experts, like Fortune 500 executives or specialized surgeons, do regularly command $1,000 hourly rates or even higher. However, for those whose resumes aren’t quite platinum-status yet, you’ll generally want to aim for typical bands within the industry.
For non-managers or people earlier in their career, a $100 – $200 hourly rate is usually the starting point. Your Tegus hourly rate can quickly climb to $200 – $350 for director-level employees or professionals with strong credentials, such as doctors or engineers. Vice Presidents and C-level executives at mid-sized firms can often achieve $500 hourly rates or a bit more. The typical rate for Tegus consultants is $300 per hour, according an interview with the Co-CEO. Rates are pro-rated to the length of the client call, so a 45 minute call will only yield you 75% of your hourly consulting rate, while your meter keeps running on a good conversation that extends beyond an hour.
Keep in mind that scarcity certainly plays a role in your rate and odds of being selected for a project. If the client wants to speak with users of a popular software package where hundreds of potential experts can easily be sourced, you may be passed over for lower cost consultants. However, if the client wants to speak with senior finance managers who recently worked at a particular company you may be the only game in town and have leverage to command a higher rate.
You may want to set your rate towards the lower end of your target band until you’ve landed your first couple of projects and established a reputation. It’s then easier to negotiate a higher hourly rate with Tegus for future projects.
How to ace your Tegus consulting call
Client calls tend to be easy and engaging conversations. It’s always nice to be considered an expert in something, and things that can be banal to you, such as how you set budgets or make purchasing decisions, can be valuable information to clients that generates unexpected enthusiasm!
Most client calls are centered on a particular company, industry, or product. The client is not expecting you to prepare a presentation or deliverable for the call; they are looking to rapidly download industry knowledge via your many years of experience. You can expect that clients have done their own basic research, reviewed publicly available information, and perhaps heard a management presentation prior to speaking with you. They have come prepared with specific questions to confirm or clarify aspects of the business.
Oftentimes, the client is researching a particular company, especially those with a recent IPO, major announcement or volatile stock price. The client will be eager to learn your honest opinion about the company’s prospects, ability to execute, and management quality. Common questions will be about how the target company compares to its competitors, product and feature differentiation, pricing strategy, quality of management, etc. These types of calls will often resolve around your former employer or a major vendor that you worked with frequently, with emphasis on the key factors influencing your decisions.
You should have an easy time answering the questions during the call – the client often wants to learn about something you’ve been doing regularly for years.. Even so, you may not have all the answers, or know figures off the top of your heads. Be honest and say you don’t know, and you should never make up answers. Clients are usually quite skilled at parsing fact from fiction, and manufactured answers can quickly result in a short call, if not a short career with an expert network.
It’s important to note that you will never be asked to share non-public or proprietary information during a client call, and doing so can be illegal in more extreme cases. One of the key responsibilities of expert networks is to ensure that improper information isn’t exchanged on a client call, with both parties bound by strict compliance standards (which you will receive prior to the call). All client calls are recorded by Tegus and reviewed by its compliance team (and often the client’s compliance team as well) to ensure that no improper information is shared. Clients are often very well versed in compliance requirements and strictly adhere to them so they are not prohibited from pursuing an investment idea or.
Tegus payment options include ACH (US-only), wire, physical check, or PayPal. After you complete a call, you will be prompted to provide payment preference and details. (Be wary of anyone asking you to provide account information prior to your first call – be sure to confirm that they are indeed a Tegus employee.). Payments are issued within 15 days of the client call.
Now that you’re a part of the network, you will periodically be contacted for participation in new projects, especially as you build a history of completing successful client calls.
Expert networks are a great way to capitalize on your experience. If you’ve been contact by a Tegus associate, you’ve already been identified as a good potential fit for an active project. Otherwise, Tegus does not offer online registration but you can contact Tegus here to express your interest in working with them.