Steven Freidkin clearly knows a little something about running a successful MSP.
Ntiva, the Washington, D.C.-area company he launched in December of 2004, does a brisk business providing IT services to healthcare clients, law firms, the hospitality industry and nonprofits.
During the past year, the McLean, Va.-firm grew from 85 full-time employees, to 125 staffers, generating revenues of about $18 million and earning the No. 71 spot on the 2016 MSPmentor 501 list of top MSPs.
In recent weeks, Freidkin announced a partnership with private equity firm Southfield Capital, a deal that will provide resources and expertise for a buying spree to grow Ntiva even faster.
“I had a game plan going into 2016: To increase operational efficiency, bring in some technical talent and to start to do the strategic acquisition to get the additional geographic footprint,” he explained.
Freidkin’s strategy calls for scouting and buying MSPs that will allow Ntiva to expand its reach, first, up the East Coast, then southward.
“We have grown, fortunately, from word of mouth and referrals; no marketing,” Freidkin said. “We haven’t really done acquisition. The reason I secured the funding was to do this right.”
He began the process by tapping business connections for a list of possible investors. Then he got on the phone.
“I was looking for an investor who had alignment with my desire to grow people, someone with a proven track record of building sales and marketing teams, and someone with access to capital,” Freidkin said.
After sifting through dozens of potential investors over a six-month period, Freidkin whittled the list down to three firms and ultimately selected Southfield Capital.
“Significant opportunity exists for a midmarket-focused MSP that understands the sector-specific needs of its clients and has the infrastructure to deliver,” Southfield partner Heb James said in a statement announcing the deal. “Steven…has clearly built a very impressive business and we are excited to have the opportunity to work with such a successful entrepreneur to continue to expand the company’s footprint.”
Freidkin is giddy about what the deal means for Ntiva.
“It means now I get to do it,” he said. “Now I get to live the dream and, for the first time ever, being able to make investments in what I know we need, just slightly before we need it.”
He acknowledged that securing those resources cost more than just equity.
“I have a board now that I report to,” Freidkin said. “They have experience. The experience they have is experience I don’t have.”
Still, he doesn’t expect that the additional decision-making layer will pose a problem.
“When it came down to it, I always engaged others before I made decisions,” Freidkin said. “So far, so good.”
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