Customer & Partner Success

How 3 Entrepreneurs Are Innovating With AppDirect Capital Invest

By Rebecca Muhlenkort / December 1, 2023

App Direct Capital Invest Blog

While each AppDirect Capital partner is unique, they all share a common trait—disrupting the channel and tech industry. Whether using Invest capital to start a new business, scale operations, or reinvesting money into the business, our partners forge diverse paths to success.

In this blog, we’ll dive into their stories, unveiling the distinctive value and mechanics of AppDirect Capital Invest. Discover what sets AppDirect Invest apart from traditional M&A or capital investment opportunities. Let's get started.

What is AppDirect Invest

AppDirect Capital Invest is a flexible capital solution for technology advisors. It combines upfront, non-restrictive capital with the power of the AppDirect Marketplace, allowing business owners to use the capital from their business to scale, innovate, retain top talent, or make outside investments. This program is unique because unlike other M&A solutions, Invest is built specifically for channel partners, enabling advisors to maintain 100% ownership of their business.

How it works

Invest capital is different from funding from a financial institution or equity firm, with significant differences in how Invest partners can access and use the funds. With AppDirect Invest:

1. You maintain 100% control of your business— In traditional merger & acquisition transactions you are giving up equity in part or in whole. With Invest, your ownership structure remains unchanged. For many advisors this means they finally have the freedom to scale back from daily operations without having to retire, with flexibility based on individual needs.

2. We focus our evaluation on the last three years of your business—For each Invest transaction, AppDirect acquires a portion of the asset that is your recurring residual cash flow. Because this is less complex than a traditional M&A, with fewer diligence requirements, the transaction can be completed in a much shorter time frame.

3. Your Invest deal typically closes within 90 days of signature —Unlike traditional M&A or financial deals that can take months or years to close, Invest deals are designed to close much more quickly and efficiently.

4. You get immediate access to liquidity—With Invest, you’ll receive an up-front all-cash offer ready to be leveraged immediately upon closing, based on your business’ recurring revenue. This is in contrast with financial institutions and equity firms that typically define restrictive conditions regarding how and when you can access capital.

5. Ultimate flexibility—Unlike other capital investments that may be more transaction based, Invest partners gain access to the AppDirect team, regardless of their next step. This may include using capital to grow and scale, stepping away from the advisor or technology business at some point, or to start a new business venture. You retain ownership and control of your business while leveraging the power of the AppDirect Marketplace and ecosystem.

3 business owners, 3 success stories

1. Starting a new business: Dave Wallace, NXTSYS CEO, turned XR visionary

Tech visionary Dave Wallace is an example of a business owner that partnered with AppDirect to scale his advisory business, expand his software practice to seize SaaS opportunities, and explore new ventures.

Despite NXTSYS drawing interest from potential buyers, including competitors and investors, Wallace and his partner Jared Adamcik were initially resistant to these opportunities. Traditional M&A options limited them to a straightforward sale and business exit. However, their interest was piqued during discussions with AppDirect because of the value and flexibility of the program.

Buying out a business partner, building revenue without adding headcount

In exploring the deal, the NXTSYS team sat down with AppDirect and discussed the company’s goals.

“The concept of maintaining ownership of our business was intriguing, so we began to brainstorm the logistics,” Wallace says. “We needed to figure out if it was possible to add value to our current business, while successfully buying out our third business partner.”

Since working with AppDirect, NXTSYS is taking full advantage of new opportunities. Their operations team now has time for one-on-one interactions with agents because they’ve offloaded some critical back-office tasks like quoting, order management, and commission processing.

“It’s incredible that we’ve actually grown our sales organization by 60% in the last year, and we have not added a single operational headcount,” Wallace says. “That speaks volumes about how the technology expertise and extra back office support translates to real revenue gains.”  —Dave Wallace, CEO of NXTSYS and Octopus XR

Investing in Augmented Reality (AR) and Virtual Reality (VR)

With the capital investment from AppDirect and the Invest program, today Wallace and his business partner are moving full speed ahead in their next big venture—AR and VR technology. The team recently launched a new channel-focused procurement platform for AR and VR business tools called Octopus XR, with AppDirect as an investor. Wallace and Adamcik own a majority stake in the innovative platform and they are thrilled to introduce these technologies to the channel.

> Read the full NXTSYS case study and watch the video below


2. Scaling growth, expanding into SaaS: Bill Patchett, Founder P2 Telecom

Bill Patchett, the Founder of P2 Telecom, serves as a standout example of an Invest partner strategically leveraging AppDirect Invest to scale and propel business growth, notably expanding the company's SaaS practice significantly. 

Closing $1,000,000 in sales with Invest, and expert back-office support

“Helping our advisors tackle larger accounts that they couldn't handle before, that’s a huge benefit of AppDirect Invest,” Patchett says. “We're tapping into the advisor community that doesn't know how to sell software—80 percent of them haven’t had the support to do it.

Thanks to AppDirect’s support, my team and I now have the freedom to get back in the saddle and to start reaching out to people saying, ‘Hey, why didn't you do a deal with us?’”

AppDirect Invest allowed employees previously focused on commissions to zero in on sales, which has had a significant impact to the company’s bottom line.

“We offloaded commissions 100% so that freed up an employee. That employee is now working on other projects to help drive sales. I would attribute it to us having done close to $1,000,000 in software sales this year.” — Bill Patchett, Founder P2 Telecom

Doubling SaaS sales in 18 months

More than streamlining its sales processes, since partnering with AppDirect, P2 Telecom is experiencing tremendous growth in SaaS sales. Patchett attributes much of the success to his team's commitment to growth along with a partner that has expert support and a massive software catalog.

“SaaS is a great example, where prior to the AppDirect Invest deal, we sold zero SaaS and we were selling let's just say $30,000 a month in new revenue. Now we're averaging $30,000 to $100,000 a month in new revenue based on the month. And I would say 50 percent of the number is SaaS.”

Read the full P2 Telecom case study

3. Re-investing in the business: John Nierzwicki and Mark Venuto, Co-Founders of US Network

John Nierzwicki and Mark Venuto of US Network have built industrious careers over the past 20-plus years, helping customers decode complexity around technology purchases. The team faced a crossroads in business and was looking for innovative ways to fast-track growth. Unsure of their next step, they met with the AppDirect team to learn about Invest’s unique program structure and benefits.

The duo was quickly attracted to the AppDirect Invest program because it enabled the business owners to maintain control, while gaining capital to re-invest in the business.

Go-to-market revamp: Access to monthly residuals drives growth

With monthly residuals from the Invest partnership, US Network restructured its compensation policies, ultimately transforming its go-to-market strategy.

"We use AppDirect Invest Capital to advance US Network. We went from an upfront commission platform to a residuals platform. This also will enable us to move into other segments, hiring different individuals to target specific segments, such as the government."— Mark Venuto, CO-Founder US Network

Growth drivers—Robust back office & sales support

Another top selling point of AppDirect Invest is that with the partnership, US Network becomes part of the AppDirect ecosystem. This includes access to the AppDirect catalog, Marketplace, advisor-specific tools, and customizable support.

"The AppDirect technology and team are a winning combination that spins our sales a lot faster now,” he says. “Typically we get quotes back the same day from the team. From there we can quickly narrow down which provider is best for the customer and provide them answers fast, allowing us to close more deals. Having all these resources and a team we trust is refreshing."

Zeroing in on cross-sell opportunities

With access to a team of experts, US Network advisors are now also pursuing high-value cross-sell opportunities involving UCaaS, SaaS, IaaS, mobility, and energy.

Here Venuto highlights how they’re bringing in mobility experts from AppDirect to close more mobility deals.

"Recently, we were able to flip a mobility request to the AppDirect team, who got us in touch with Bell Canada. We ultimately got 50 max circuits implemented in just 14 business days. That is simply remarkable and something we couldn't have done without the team."

In another example, US Network was able to successfully upsell solutions from the AppDirect catalog, increasing a deal from $433 to $187,000 with $100K of that contract being sold directly through the AppDirect Marketplace. Stay tuned for more details in the case study featuring Venuto!

Read the full US Network case study

Think Invest is right for you? Ask these questions?

1. What are my main priorities for the upcoming year?

Do any or all of these apply?

  • Grow my team

  • Compete with larger advisor businesses

  • Recession-proof my business

  • Diversify my portfolio and sell cloud

  • Focus on what we do best, selling

  • Start a new venture and make an outside investment

2. To meet my business goals, I am currently considering…?

Do any or all of these apply?

  • Taking on a loan to re-invest in my business

  • Looking for a new partnership opportunity

  • Strengthening my operations

  • Acquire another business

3. Which one sounds more like you?

Do any or all of these apply?

  • I care about maintaining ownership of my business and being my own boss

  • I am ready to start a new business venture

Latest Invest news: $100 million in funding from CDPQ

Read our press release announcing that AppDirect has secured an additional $100 million in funding from long-term investment partner CDPQ. Learn how this investment further unlocks advisor growth, increasing the total program funding to $180 million.

Interested in learning more about AppDirect Capital Invest? Visit our Invest page to learn more or get in touch with Jeremy Jones, the Managing Director, AppDirect Capital and Head of Sales Operations.