What MSP Operators Overlook in Operations Before Selling—Insights from Evergreen’s Craig Fulton

Dave Sobel (0:01)

Dave Sobel here, reporting from the floor of Channel Com, joined today by Craig Fulton. Craig is an M&A advisor at Evergreen Services Group. They're one of the largest MSP acquirers in the world, 47 deals last year. Before that, 16 years at ConnectWise, Chief Product Officer, then Chief Customer Officer, and one of the people who built the IT Nation community. So this means a lot for the listeners of my show to understand that you'd be one of the first people that they'd meet as they're thinking about selling. Now, two quick things from a disclosure perspective up front. This was booked through Evergreen's agency and nobody's paying for this coverage. Craig's interest here is around a buyer's interest, and that's what we're going to be talking about today. Craig, welcome to the show.

Craig Fulton (0:44)

Thanks for having me, Dave. Good to see you again, man. It's been 16 and a half years, man. I know.

Dave Sobel (0:47)

It's like ages. So let's talk about the state of Evergreen right now. What you guys have done in the last 12 months or so and what's changed.

Craig Fulton (0:57)

We wrapped up last year with, like you said, we acquired 47 total businesses. We operate in three different IT service markets. We have MSPs, application service businesses, and then government IT like contract, very niche in the US. We wrapped up last year with a total of, I believe 135 MSPs acquired and 171 all companies.

Close to year, 1.5 billion in revenue and 250 million in EVTA. It's crazy to think how big it is. But we love our mission and how we make it feel very personal inside of Evergreen. It's not just a big corporate machine.

Dave Sobel (1:42)

One of the things I talk a lot about on the show is understanding everyone's financial incentives so that we know where we're coming from.

You're not a founder and you're not necessarily the capital, so you're one of the people that an owner might meet first. Do you have equity in Evergreen? Are you compensated on a deal's close? How does that push them?

Craig Fulton (1:59)

Okay.

I do have equity inside the company. I'm one of the shareholders there, so yes, I truly enjoy meeting my business owners. Like you said, my history being at ConnectWise, I met so many MSP owners early on, watched them grow. Now I'm coming back through talking to them, sharing this one option that they have out of many, because I feel that MSP owners deserve to get that big financial payday. I mean, it's a hard business to run. You're supporting small business in your community. But yeah, I mean, my job is sourcing business, going out looking, finding good MSPs.

Dave Sobel (2:40)

Makes perfect sense. The reason I asked you is that we baseline and going to have an open conversation while it's going on. So you've been really consistent around the fact that MSPs should fix their operations whether or not they plan to sell. It's a message you've been delivering pretty good. Give me your version of that. What's the concrete version of your message to MSPs about how they should fix their operations?

Craig Fulton (2:58)

Yeah.

There's no fault at this. A lot of businesses are being read by technical people. These are people like you and I back in the day, we love tech, we had some customers. All of a sudden, we hired some employees. Now, all of a sudden, we had a business.

They should get focused on running it now like a business. Think about managing it from the financial perspective, making more financial decisions, not technical decisions. That does come along with some operational maturity. Think about who's filling what role in a company.

A lot of these businesses, the founder is wearing multiple hats. They're the account manager, they're the business development, growth leader. They're running the business, they're doing finance. When I say work on operations, start hiring and filling those roles. You should be able to point to someone and say, that person's full-time job is nothing other than finding new business for us. I would get really serious about that.

Dave Sobel (3:59)

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