I’ll eat my own words (kind of) in today’s blog. I don’t usually do this but this is an important topic and I believe it’s better to be on the right side of an issue rather than stay comfortable in a settled opinion. What I’m referring to is the increasing positive role credit is playing in the IT managed services channel. More specifically, I’m referring to the role institutional venture capital firms are playing in helping managed service providers (MSPs) prosper. Allow me to explain.
It used to be that instituional investors (VC firms, angel investors, private equity groups, etc.) were only interested in funding hardware and software vendors or the larger MSPs. Companies like InteQ, SevenSpace, FusionStorm, mindSHIFT, and others, were early recipients of investor funding speciically to encourage growth in what was then the nascent managed services market. I’m talking about 10 years ago or more.
For nearly a decade, if you weren’t a vendor or a medium or large sized MSP, chances are you weren’t going to get funding. Why? Probably becuase the model hadn’t proven itself yet. At least that’s what the money people were likely thinking. A more likely reason is that investors were more focused on larger deals as this had been the primary investment vehicle of the dotcom era. What a difference a decade can make.