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Vology CEO Barry Shevlin To Start New Midmarket Technology Practice For Skyway Capital

‘Based on the macro environment, there is going to be an accelerated consolidation in the IT services market,’ he says. ‘I know we can help folks get through this whether it is with raising capital or facilitating mergers and acquisitions.’

Vology CEO Barry Shevlin, who founded and built a nearly $200 million solution provider business, has been tapped to lead a new U.S. midmarket technology practice for Skyway Capital Markets LLC.

Shevlin — a financially savvy tech veteran who bootstrapped his business — took on non-control equity four times and recapitalized the business in November, takes the reins of the new technology practice for Tampa, Fla, based Skyway just as the economic turmoil from the coronavirus pandemic is kicking into high gear.

Shevlin, who navigated multiple severe economic downturns as CEO including the 2008 financial meltdown and dot-com bust, said his new job as a senior managing director advising midmarket technology companies on raising capital, restructuring and mergers and acquisitions (M&A) is critical to helping companies survive the pandemic and thrive in the post pandemic economy.

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“Based on the macro environment, there is going to be an accelerated consolidation in the IT services market,” he said. “I know we can help folks get through this whether it is with raising capital or facilitating mergers and acquisitions.”

The simple fact is that there is going to be a percentage of customers for every midmarket technology company that are not going to reopen, said Shevlin. “Everybody is going to have to deal with that,” he said.

Making matters worse, customers that remain are deferring or delaying payments in the midst of the pandemic, said Shevlin.”That’s causing a cash crunch,” he said. “That is something that is happening across the entire technology ecosystem. It’s a real issue. If companies aren’t really well-capitalized they are going to have to do something whether it is raising some additional capital or maybe accelerating a sales process. That is the reality of what is going to happen.”

Shevlin has hit the ground running and is already in conversations with a telehealth company, a security company and a data management company. “There’s clearly no shortage of companies that need help right now,” he said.

Even with the fallout from the pandemic, Shevlin said the opportunity in the midmarket has never been greater for technology companies including MSPs (Managed Service Providers).

“Midmarket customers are the last to the game from an IT outsourcing perspective,” said Shevlin. “Fortune 500 companies have been outsourcing IT for decades. Small businesses have been using the small local MSPs forever. But there has been a huge void in the midmarket because they were too big for the small MSPs and not big enough for the global integrators. It’s a fantastic place to do business and it’s not a place our OEM partners get to directly. They need to leverage the partner ecosystem to be successful there.”

Many midmarket companies are going to be looking to outsource their IT operations in the wake of the financial hit from the pandemic, said Shevlin. “Outsourcing IT and accelerating cloud migrations is going to be a way for midmarket companies to save costs going forward,” he said. “MSPs have a value proposition that is going to resonate.I think it’s a fantastic time to be in the midmarket technology market.”

One of the keys to success going forward, said Shevlin, is to help midmarket companies reduce costs with technology that is resonating like cloud services and unified communications, said Shevlin.

“In the rush to getting workforces to work remotely from home, companies have begun to see the structural issues they have had,” said Shevlin of the technology trends set to accelerate in wake of the coronavirus. “Customers that were further down the road in their cloud migrations and UCaaS (unified communications as a service) found it a lot easier to get people working remotely. Customers still on legacy systems found it more difficult. That should result in accelerated migrations to the cloud and more outsourcing.”

During his nearly 20 years running Vology, Shevlin said his financial experience has been critical in the company’s success. “At different points in time when we needed capital, we took a pretty creative approach – mostly a non-dilutive approach to raising capital, leveraging bank debt and sub-debt,” he said. “That enabled us to grow to almost $200 million in revenues without a lot of dilution.”

Vology raised non-controlled equity on four different occasions in 2006, 2008, 2011 ad 2017, said Shevlin. Those equity rounds were combined with traditional bank debt and subordinated or mezzanine debt as well. In November, Shevlin completed a financial recapitalization led by Capitala Group, a Charlotte, N.C.-based investment bank.

Shevlin, who was an E&Y Entrepreneur of the Year finalist in 2014 and Tampa Bay Technology Forum CEO of Year in 2012, said key to his success in his new job is his track record starting and running a successful business.

“The bankers I have met that resonated with me over the years were the ones that ran their own business and then got into banking,” he said. “When you are sitting across the table from a CEO of a $150 million company and they know you have run a $150 million company it is a different level of credibility than someone that has been a banker for their whole career.”

Shevlin said he is most proud of the culture at Vology that allowed a number of executives that started in entry-level positions to rise through the ranks and become top executives including a part-time Network Operations Center (NOC) tech who is now the Chief Innovation Officer, a purchasing agent that rose to VP of business operations, and an employee that started out building cubicles who is now the senior director of business enablement and innovation.

Skyway Capital has been a positive force for midmarket businesses grappling with the pandemic by stepping in to help customers navigate and win critical Paycheck Protection Program (PPP) loans from the Small Business Administration, said Shevlin.

Skyway, in fact, quickly spun up a PPP practice and helped dozens of customers get assistance through the complex SBA loan process, said Shevlin. “That assistance is a tribute to Skyway’s ability to move quickly to help midmarket customers,” he said. “How many investment banks move that quickly?”

Shevlin said he couldn’t be more excited about leveraging his financial and technology expertise to help companies succeed in the new normal resulting from the pandemic.

“At Vology, we raised capital in so many different ways. I’ve got a lot of relationships whether it be private equity or sub-debt providers that also play in the minority equity investment world,” he said. “I’ve run my own business for 20 years so it is unlikely I am going to see a company with a financial scenario or problem that I haven’t solved before.”

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