Empath, a training and education platform for managed service providers, has successfully raised $2 million in a funding round entirely backed by industry insiders. This initiative aims to deepen community engagement and give those relying on the platform a stake in its growth. Co-founder Wes Spencer emphasized the significance of having the funding come from within the managed service provider ecosystem, stating, “We wanted MSPs to have skin in the game.” Founded in 2023, Empath is on track to reach $1 million in revenue by July and currently serves over 325 managed service providers. The funds raised will primarily focus on product development and expanding outreach efforts, including marketing and hiring in key roles. Spencer noted that future funding rounds may include private equity backing while still ensuring that managed service providers have a voice in the process.
Why do we care?
“Industry insiders” was the best I could come up with for “some other MSPs.” Empath’s $2 million raise deserves attention not just for the money, but for who it came from and what that says about the company’s model and market positioning.
Here’s why this matters, and why it’s worth both optimism and scrutiny:
Empath has mined its own user community for capital. Wes Spencer calls it giving MSPs “skin in the game.” That’s clever, even admirable, and helps create advocacy as Investor-customers are loyal customers. It fosters evangelism. Those with a financial interest are more likely to promote the product. And it Signals alignment: The company is literally owned, in part, by the community it serves.
But let’s not get too romantic. There’s little detail on investment structure—equity vs SAFE notes, voting rights, board seats—which matters a lot when the investors are also the customers. Is this ownership meaningful or symbolic?
While this model may build early momentum, it raises flags for the longer term:
- Not scalable: Your customer base has finite capital and risk appetite. Future funding likely depends on traditional VCs or PE.
- Governance unclear: If MSP investors expect influence, how is that managed? If they don’t have influence, is this just “community marketing” dressed up as equity?
- Potential conflicts: What happens when business decisions (pricing, partnerships, roadmap) don’t align with investor-customer expectations?
Spencer hints at eventual PE backing “with MSPs still having a voice.” That’s a hard needle to thread if PE exerts typical control.
There’s real upside here—but without disclosure on terms, governance, or board control, MSPs should treat the investor pitch the same way they evaluate vendor relationships: with optimism, and with due diligence.