Bellini Capital is a firm that invests in companies that make our world safer, smarter, and more sustainable. Pulse 2.0 interviewed Bellini Capital managing partner Arnie Bellini to learn more about the firm.
Arnie Bellini’s Background
What is Bellini’s background? Bellini said:
“I began my career at Pricewaterhouse just as personal computers started their evolution from space-age technology to a household necessity. Realizing the potential of this leap, I left my consulting job and founded a company to help small businesses optimize their servers.”
“I co-founded ConnectWise as a Managed Service Provider (MSP) in 1982. In 1998, I transformed the company’s best practices into an integrated business management platform for technology solutions. Under the guidance of myself and a great team, ConnectWise was at the forefront of helping MSPs become successful by building recurring revenue around technology services. In 2019, I sold ConnectWise to private equity firm Thomas Bravo.”
“After the acquisition, I stepped down as CEO and launched Bellini Capital, a private investment firm with the mission of building a technology innovation ecosystem. We invest in companies that make our world safer, smarter, and more sustainable.”
“A lot of our investments are in cybersecurity because that’s a critical function for MSPs to start owning. Not only do they need to provide their clients with better protection, but they can also double their revenue by offering these services. To do that, though, the right groundwork must be laid. Today, there are too many disconnected tools that are overwhelming MSPs. We must consolidate those silos of chaos and start working within a central set of connected applications and create one place where it’s all accessible. This will allow MSPs to offer much better service and support for clients while helping them do a better job of defending their digital borders.”
Formation Of Bellini Capital
How did the idea of Bellini Capital come together? Bellini shared:
“I got very involved in a lot of other things once I exited ConnectWise. Then I came back and attended an industry event for MSPs with my son, Peter Bellini. We walked away thinking that this industry is in worse shape than it was before from a tool standpoint, from a pricing standpoint, from a scalability standpoint. We both acknowledged the paramount importance of focusing on cybersecurity at this moment. As a result, Peter joined forces with a great team of highly accomplished cybersecurity visionaries to focus on ConnectSecure, a vulnerability management solution, with investment support from Bellini Capital.”
“That was just the beginning, though. Every industry is really an ecosystem of products and services. We’re zooming out from that ecosystem and saying, where is it stuck? And that’s what we’re making our investments in: getting MSPs unstuck. How do we better connect them to the solutions that let them get their jobs done quicker, faster, better? How do we make each one of their employees tremendously productive? How do we spread their labor costs out across a broader client base, so they have greater scalability? That’s what we’re addressing.”
“I’ve said it before, I intend to die with very little money. I want to invest it wisely, and I can’t think of a better place to do that than to help my friends in the managed services industry.”
Bellini Capital’s Mission
What’s the mission of Bellini Capital? Bellini affirmed:
“Our mission is to ethically build profitable businesses while practicing responsible capitalism. We strive to create lasting value by nurturing a thriving environment, skilled workforce, and a secure digital infrastructure. We do this by investing in cybersecurity, education, and conservation.”
“As part of our mission, we’re dedicated to preserving the Florida wilderness from development, striking a delicate balance between economic growth and ecological preservation. Our approach is assertive, as evidenced by our recent successes. For instance, our advocacy efforts led to the passing of the $300 million Florida Wildlife Corridor Act last year. Now, we’re allocating $5 million towards an ambitious statewide media campaign called “Live Wildly.” The campaign aims to educate Floridians about the advantages of safeguarding the interconnected network of public and private lands that span the state—the very corridor crucial for facilitating wildlife migration.”
Investment Thesis
What does Bellini Capital look for in an investment? Bellini noted:
“We look for investments that increase the productivity of managed service provider companies by 10x. This can come in many forms, from administrative efficiencies to cybersecurity and compliance. Certainly, artificial intelligence is key. We’ve made an investment in a company called Nine Minds, which leverages AI to help technicians at the help desk do a better, faster job of serving end customers.”
“When companies like these free up resources for MSPs, that skilled labor can be redirected to higher value activities. All of it combines to create opportunities for these businesses to be more impactful, scale faster, and significantly increase their profitability.”
Thoughts About Cybersecurity Sector
What are your thoughts on the cybersecurity sector as it relates to MSPs? Bellini pointed out:
“MSPs can double their revenue by providing cybersecurity services to clients. There are six components that MSPs must provide to clients that will protect the attack surface by 80% to 90%.”
“Four of those are services they are already offering as part of their IT managed services stack – antivirus, backup rotation, MFA, and User awareness training. MSPs need to add risk assessment and policies and procedures to that service portfolio.”
“This will allow them to scale their business and have much better service and support for those clients to have a more efficient and more effective way to defend their digital borders.”
“I believe MSPs have a sense of duty to protect the U.S.’s digital borders against nation states that would attack the country’s infrastructure. It’s their defining moment to do that.”
Challenges Faced
What are some of the challenges faced as an investor in the MSP industry? Bellini acknowledged:
“The real challenge is that I’m not just looking for companies that can grow fast and be sold off or go public in a certain timeframe. I’m building a better mousetrap for MSPs, and it takes different pieces that all achieve some part of the big picture goal. They provide efficiency, tools, or training that boost MSPs – but I don’t look at them in isolation.”
“That makes finding the right companies a little more challenging. The criteria are in some way defined (providing improvements and scalability for our target market), but there’s also a little bit of ‘I’ll know it when I see it’ in terms of the potential impact on the industry. It’s an art that goes beyond the numbers and is atypical in the VC world.”
“I’m overcoming the challenge by being vocal about what I’m trying to accomplish, talking to the right people, and being aggressive in building out this ecosystem. I’m lucky to have a great network filled with a lot of smart people who really know MSPs. I’m not shy about tapping their expertise, collaborating, and seeing where their vision and my vision intersect.”
“TechGrid, one of our more recent investments, is a great example of this. I met the CEO, Philip Wegner, at an industry conference, and right away it was clear that we shared a vision and a very clear understanding of the chaos MSPs are dealing with when it comes to their tech stack. We started to chart a course that will adjust the platform he and his team created so it can be a powerful answer to that solution sprawl.”
Investment Goals
What are some of your investment goals? Bellini concluded:
“I view Bellini Capital portfolio company goals the same as the goals for the MSPs we’re helping – to get to a 10x increase in productivity, a 2x increase in revenue, and a 3x increase in valuations.”
“Beyond that, we will continue to focus on responsible capitalism – recognizing that business profitability and stewardship of a region are not mutually exclusive. Our goal is to make Tampa Bay one the nation’s top technology hubs and to do that requires carefully balancing natural resources so that our city remains beautiful, stable, and resilient.”
“It’s that holistic view that drives Bellini Capital. We aren’t just investing in companies with an eye on returns, although of course that’s important. We are investing in the people and the environment that are part of this broader ecosystem. We’re launching cybersecurity educational programs to train the current and next generation of professionals; we’re investing in the natural ecosystem through nonprofit initiatives and conservation efforts. All of this must work together, and that’s what we’re focused on in the coming years.”
