MSPAlliance Launches Angel Investors Group to Fund MSPs
The MSPAlliance has launched an Angels Network, which the association calls a “unique community that will connect early-stage Managed Service Providers (MSPs) with potential investment opportunities.” Details about the angels network are expected to surface at this week’s MSPWorld conference in Los Angeles. Here’s what the MSPAlliance has said so far, plus some MSPmentor perspectives.
According to an MSPAlliance press release:
The “MSPAlliance Angels Network will be an effective venue for young MSP executives to meet qualified investors with a specific interest in this market, and secure the capital to help grow their businesses reach their highest potential.”
The release adds:
The MSPAlliance Angels Network will focus on funding opportunities between $25,000 USD to $10,000,000 USD, investment ranges typically not served by the venture capital funds. This Network will also offer strategic mentoring, business advice, communications and marketing counsel, as well as executive leadership consulting through highly specialized consultants.
I applaud efforts to grow the managed services market and reward entrepreneurs for their hard work. But it’s difficult to say how effective the MSPAlliance Angels Network will be without knowing who is in the network.
Dig a little deeper on the MSPAlliance web site and you’ll find the following additional details:
- “Angels typically invest between $25,000 and $100,000 per transaction individually, and from $250,000 to $750,000 as a group.”
- “Angels typically invest in one to four transactions per year.”
- “On average, angels are patient, with an average term for holding an investment of eight years.”
- “For the risk and added value they provide, angels seek returns of at least ten times their investment.” (MSPmentor note: It will be interesting to see how many MSPs expect to turn a $100,000 angel investment today into a $1 million angel reward within eight years.)
- For the funding process, “approximately three companies per month are selected to present to our members for funding consideration.”
- “Due to the nature of our organization, MSPA Angels Network cannot execute non-disclosure/confidentiality agreements.” (MSPmentor note: That statement surprised me, considering the confidential nature of business investments.)
According to its website, the MSPAlliance serves 10,000-plus members in multiple ways, connecting members with experts on leasing, insurance, health care, legal issues and other key areas of expertise that are vital to an MSP’s daily business operations. In recent months, the MSPAlliance seems to be focusing more and more of its time on merger and acquisition guidance and funding efforts.
In addition to launching the angels network, MSPAlliance President Charles Weaver also is CEO of Weaver & Associates Ltd., which advises MSPs on mergers and acquisitions. Weaver & Associates also is involved in MSPXchange, a “marketplace for small managed service providers (MSP) to monetize their business through either a structured merger or acquisition strategy,” according to MSPXchange founder The Utility Company.
We’ll be watching to see how the MSPAlliance continues its broader mandate — “to define and promote the Managed Services industry by educating consumers on the benefits of using Managed Service Providers” — while newer efforts like the angels network, Weaver & Associates and MSPXchange consult with selected MSPs in such areas as mergers, acquisitions and funding.