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Arnie Bellini, the Tampa magnate, answers the phone for an interview and says its coincidental timing — he just hung up from a call discussing a multi-million-dollar deal. It’s official: Bellini’s short-lived retirement is over.
In a watershed 2019 deal, Bellini sold ConnectWise, the managed service provider he co-founded with his brother, to Silicon Valley private equity firm Thoma Bravo for more than $1 billion. The deal created 70 millionaires overnight. Bellini's five-year noncompete, which rendered the Tampa Bay businessman a hobbyist investor, will formally end on Feb. 28. Now, Bellini and his former colleagues are set to push the Tampa Bay tech flywheel harder.
The deal was a proof of concept in the form of a billion dollars, Bellini said. It spread capital and implanted a high-tech DNA talent base in the area. Those ConnectWise alumni, or seeds, have launched sundry startups since 2019, each earning various degrees of success. Some are direct offspring from this infusion of capital, and some are related to the deal through connective tissue.
“The exit was a whole bunch of acorns dropping and creating an oak forest around ConnectWise,” Bellini said.
2024 marks a five-year retrospective and a first look at the success of Arnie Bellini’s broader goal to make Tampa Bay a Silicon Valley-like tech hub.
“There’s $6 trillion of private equity capital sitting on the sideline looking for good companies to invest in,” Bellini said. “Everyone is getting phone calls.”
Catching investor’s eyes
“We always said at the time that ConnectWise was Tampa Bay’s best-kept secret, which wasn’t a compliment,” Robert Isaacs, a ConnectWise alumni and founder of software startup Nine Minds, said. “It was very difficult to get people to talk about what was going on here, and the deal made people sit up and take notice.”
Nowadays, private equity and venture capital companies are investing in managed service providers and snapping them up to build a larger company, Isaacs said. It’s because investors have noticed how profitable and expansive these businesses can be. Small- to medium-sized businesses – the customers for this information technology market – comprise 60% to 80% of the economy. And the need for cybersecurity and tech at each business is growing.
In many ways, the Thoma Bravo deal pioneered this demand because it showed the size and magnitude of an MSP – and it did this in Tampa Bay.
“Being a central location for technology for MSP companies has drawn a lot of capital and a lot of companies to this area,” Isaacs said. “And that happened slowly and then suddenly.”
Joe Panettieri is the founder of the angel investor group Channel Angels and an advisor for ConnectWise and Florida Funders. He has watched and reported on the space for more than a decade.
The new generation isn't only a group of spinoffs, he said. They're industry veterans returning in new ways because they recognize the potential, the competition and the budding ecosystem, he said.
“This MSP software and MSP ecosystem is in their DNA now, and they're very good at understanding that symbiotic relationship of developing software that MSPs can use,” Panettieri said.
There’s an “undeniable” trend of a small but growing number of investors – including roughly 100 private equity firms – making investments because they identify the value of selling through this model, he said.
“Generally speaking, traditional private equity and venture capital were late for that because they were so focused on enterprise software,” Panettieri said.
Thoma Bravo was one of the first to see that opportunity, he said. But now it’s happening in a big way. That wasn’t as common five years ago, he said.
Business leaders also learned about what they did right or wrong through the exit, Panettieri said. The lessons and confidence transfer to the next venture.
“It is interesting because sometimes when software companies have success in Silicon Valley, they burn out,” Panettieri said. “They don't have that energy anymore to keep building new things. But I think in the Tampa area, there's this belief system that the MSP industry, despite all the success and growth over the last ten to 15 years, despite all that, there's still this thought that we're just getting started.”
Since 2019, Palo Alto firm Meritech Capital led a $31 million Series B funding round for Rewst, a software startup founded by Tampa serial entrepreneur Aharon Chernin. Before that, Boston-based venture firm OpenView led a $21.5 million Series A round in 2022. Rewst also raised more than $7 million in funding in 2021. Both raises ranked on the top deals of the Tampa Bay tech scene in 2022 and 2023.
Chernin’s previous company, cybersecurity firm Perch, was also one of the first acquisitions by ConnectWise after the 2019 deal. While Chernin doesn't attribute his success solely to ConnectWise, he sees how it energized the market.
"Even if Connectwise isn't behind the capital, it has increased the general investment capital into Tampa [Bay] for startups," Chernin said.
Where are they now?
A premonition of wealth and success wasn't the inspiration to apply to ConnectWise’s internship program for Issacs, the founder of the early-stage Tampa startup Nine Minds. In reality, he applied to do “cool” computer stuff, he said.
“If I hadn't gone to work at ConnectWise at that time, I probably would have done what a lot of what my peers were doing, which is looking elsewhere,” Isaacs said.
He might be working in the space industry in Melbourne or at an industrial company in Tampa. It would have been a very different life, he said. He became the chief software architect at ConnectWise and worked there for 16 years.
Twenty-three years later, five years after his hoard of equity converted to cash, he is still a software developer in Tampa. But the deal has allowed him to explore his interests, he said.
“It’s really opened up the opportunity to be creative rather than have to do things for any other reason,” he said.
Isaacs is growing his almost two-year-old startup, Nine Minds, an AI company for the managed service provider ecosystem. His friend and now partner Arnie Bellini provided seed capital.
Others with this background, the learned and shared experiences of working with a tech unicorn, include CyberFox, ConnectSecure, Rewst, TimeZest, Empath, Zorus, Adaptive Catalog and ConnectOn.
Gerwai Todd, a former ConnectWise director of corporate business, launched the scheduling platform TimeZest in 2020 with $50,000 in seed funding. The startup now hosts more than 1,000 subscribers and has an annual recurring revenue of more than $2 million.
Another firm, cybersecurity startup ConnectSecure, is run by Arnie’s son Peter and is topping $5 million in annual recurring revenue, Arnie Bellini said.
“This new generation of companies that are starting up, specifically some of them, are being funded by Bellini Capital and the acquisition, but in general, there’s this new round of companies,” Isaacs said.
Brett Cheloff, the CEO of General Catalyst-invested cyber firm Zorus, co-founded the company behind ConnectWise’s first acquisition. He spent 12 years with the company and knows where he would be if he hadn’t met Bellini.
“I’d be nowhere,” he said. “I would probably be working at restaurants back in Ohio, [someplace like] Chi-Chi’s Mexican Restaurant.”
But the acquisition launched his career and gave him a front-row seat on the unexpected ConnectWise “rocket ship." It’s why, years later, he’s bullish on Tampa Bay and aims for Zorus to be a Tampa company. Zorus was based in Connecticut, but since his appointment in 2023, Cheloff has opened a Tampa office and focused on recruitment locally.
The name drop is legitimizing – the founders have experienced and participated in a unicorn.
“I've noticed that people are capable of getting investment from venture capitalists or things like that because they have this [ConnectWise] story to tell,” Cheloff said.
Adam Slutskin, the former chief revenue officer of ConnectWise, pivoted to working for Texas-based Liongard and consulting after the acquisition. During the pandemic, one of his consultant companies, PasswordBoss, called Slutskin for advice on taking the company "all the way."
"I had a Eureka moment," Slutskin said. "It's like a Friday night, 8:00 o'clock. I call my boy Dave, and I'm like, 'Dude, I got this idea, and I wanna see what you think.'"
Slutskin wanted to buy the company. The company offered a chance to work with their sons and build a profitable business.
"I tried to ignore him," David Bellini, Arnie's brother, said. David, under the same five-year non-compete, retired after the acquisition but was convinced to join and run the company until Slutskin could formally join as chief revenue officer.
The two now lead cybersecurity firm CyberFox. The Tampa company has made acquisitions and has roughly 70 employees. Like ConnectWise, regionality is part of its mantra. It recruits early-career employees in the Tampa Bay area and gives them equity in the company.
"This is exactly what happened with ConnectWise," Slutskin said, on the MSP's meager start and upgrades through partnerships and acquisitions.
The CyberFox office on Independence Parkway shares space with Arnie Bellini. One-half of the space is for Arnie’s companies, and CyberFox uses the other.
As for Arnie Bellini – he has enjoyed his time off. He has found new interests and improved his health. But he’s ready to return to his roots. The MSP space needs the next wave of innovation, he said.
In some ways, the Bellinis and Slutskin agree the group draws a parallel. Just as Silicon Valley's PayPal mafia, a prominent group of entrepreneurs including Elon Musk and Peter Thiel, settled a second wave of Silicon Valley in the early 2000s with internet companies, the next iteration of the MSP industry in Tampa is ripe for pioneering.
“The ConnectWise Mafia is not going anywhere. The Tampa influence is only growing. Arnie is back,” Slutskin said. “We believe we can make a direct impact."
Robert Isaacs, the CEO and founder of Nine Minds
Arnie Bellini's playbook for an evolved Tampa Bay tech hub
ConnectWise co-founder and investor Arnie Bellini has a four-pronged approach to bringing Silicon Valley strategies to Tampa Bay, he said.
The first play has touched down. It’s a proof of concept in the form of the $1 billion deal, he said. The second play was to share the wealth and plant the seeds of a metaphorical oak forest. Through Bellini Capital and this new string of startups, the implanted high-tech DNA talent base has taken root, Bellini said.
And now, the third play can be seen in the maturation, growth and reinvestment in the Tampa Bay tech scene. As new startups multiply, he hopes that sometime soon, they will need less pushing.
He also launched Bellini Capital shortly after the 2019 Thoma Bravo acquisition with a reported $50 million to deploy. He invested in several startups, including Tampa's 3D Cloud by Marxent and Knack, and a New Hampshire-based MSP software company.
In 2022, Bellini founded the Live Wildly Foundation, which seeks to preserve the 17.7 million-acre Florida Wildlife Corridor. He hired a McKinsey and Co. consultant and funneled more than $25 million to the initiative.
But the fourth and final component of the playbook is building. In addition to scouting and recruiting in Northern California and nationwide, Bellini has invested in higher education to create the "virtuous cycle" between an academic institution and university innovation at schools like Stanford University. In 2022, he donated $10.6 million to establish USF’s Center for Talent and Development. Bellini wants USF’s center to become the "Stanford of Florida."