Acquiring Minds: ETA Unicorn — $1 Billion in Revenue in 5 Years

Podcast: Acquiring Minds
Host: Will Smith
Guest: Steve Carroll, CEO & Co-Founder, Kelso Industries
Date: December 4, 2025

Overview

This episode features the remarkable entrepreneurship-through-acquisition (ETA) journey of Steve Carroll, who rapidly built Kelso Industries from a would-be single-business buyout into a commercial services “unicorn.” Over just five years, Steve and his partner rolled up 31+ companies in commercial mechanical, electrical, and plumbing services (MEP) to $1.2 billion in annual revenue. This conversation dives into key inflection points, hard-won lessons, and the partnership model that powered such unprecedented scale—offering both practical insights and strategic frameworks for acquisition entrepreneurs.

Main Discussion Points & Insights

1. Introduction & Steve Carroll’s Background ([07:17]–[09:35])

Kelso Industries Today: $1.2B revenue, 31+ acquisitions, ~10% EBITDA margins, 3,000 customers, 10,000 annual jobs.
What They Do: Commercial and industrial MEP (mechanical, electrical, and plumbing) services—offering everything from construction to ongoing maintenance nationwide.
Steve’s Personal Path: Grew up working with his hands, studied construction, identified major coordination pain points among MEP trades while working in general contracting.

2. Industry Pain Points & Business Vision ([09:35]–[15:00])

Fragmentation & Complexity: Most MEP companies are < $50M revenue and siloed (electrical, plumbing, HVAC as separate companies). Coordinating among them makes life difficult for property owners, GCs, and building managers.
The Opportunity: Offer an integrated, lifecycle solution to building owners—“the Kelso Flywheel” (from construction to service/maintenance and replacement).
Rare Model: Fully integrated commercial MEP firms are very rare and almost nobody does it at scale ([14:34] Steve Carroll: "Very rare. Very, very, very rare. There's a few players... but nobody does that at scale.").

3. Steve’s Early Career & Entrepreneurial Spark ([15:00]–[18:03])

Walmart Tenure: Learned about culture and leadership at scale; credits Sam Walton’s legacy for influencing Kelso’s people-first culture.
Entrepreneurship Roots: Lifelong entrepreneur, always side-hustling, but kept steady employment for family security.

4. First Acquisition Attempt: Difficulties & Lessons ([18:03]–[29:00])

Initial Plan: Buy a small HVAC business with an SBA loan, keep W2 job, run it “passively.”
Painful Reality: General Manager left pre-close, surprise cash needs, and the myth of “passive” small business ownership quickly fell apart.
- Quote [25:32] Steve Carroll: “This entrepreneurship thing is really hard... I can't do this.”
Key Learning: Passive ownership rarely works; new owners must be hands-on, especially with small, messy businesses.

5. Pivot to Larger, More Sustainable Acquisition ([29:00]–[34:24])

Going Bigger: Decided with partner Steve Nicholson to find the biggest business they could buy using an SBA loan—seeking redundancy, management depth, and process maturity.
Phoenix Opportunity: Identified a $17M commercial HVAC business as target—discovered major working capital shortfalls that upended the deal structure.

6. Raising Institutional Capital: The Inflection Point ([36:44]–[45:05])

From SBA to Independent Sponsor Model:
- Needed more than the $5M SBA ceiling; raised institutional capital through Peterson Partners (Salt Lake City).
- Quote [39:41] Steve Carroll: "We had to expedite our vision... Buying a $2M EBITDA business, we need to show how we're going to grow this to $10M of EBITDA."
- Committed capital for acquisitions, no debt initially—gave flexibility to weather surprises.
Deal Closed: First deal closed in May 2021 (Arizona), Steve’s Achilles ruptured right after, yet he pushed through to onboard and reassure the new team ([51:26] “Missed my flight. Had to get an early flight the next day because I wasn't gonna... mess up the opportunity of a lifetime.”)

7. The Hard Slog: Owner-Operator Realities ([54:46]–[63:08])

100+ Hour Weeks: Steve (and Nicholson) ran the business hands-on, immersing in all aspects: hiring/firing, sales, cash management; family moved months later.
- Quote [57:14] Steve Carroll: "I'm in there at 4:35am every day when the shop opens and I'm the last person there. I go home, see my family for a little bit and then I work on, on the business the rest of the night."
Management Gaps: Lacked true management depth, no escape from day-to-day trenches.
Failed “Jamming In” Attempt: Simultaneously tried to buy other firms and “jam” them into their existing business—didn’t work well.

8. The Unlock: Partnership Model ([63:08]–[79:06])

Key Innovation: Instead of just acquiring and absorbing, Kelso began partnering with business owners, letting them roll 20–40% equity into the parent (Kelso) and remain as autonomous leaders.
Founding the Model: Pitched (successfully) to a larger Idaho HVAC owner—become part of Kelso, pursue bigger vision together, and access growth resources.
- Quote [65:03] Steve Carroll (on the pitch): “You should partner with us... I have some resources. I have a vision. Can we do this together? 1+1=3.”
Flexible Integration: Decentralized at first, light-touch partnership, more integration over time as scale demanded. Focused on respect, autonomy, and mutual benefit.
Standalone Platforms: Avoid full “jamming” on day one; let new companies act as platforms, integrating backend and support functions gradually.
Integration Wisdom:
- Quote [83:39] Steve Carroll: “If you force an integration too quickly, expect major issues. That's my big learning.”

9. Scaling: Explosive Acquisition Trajectory ([79:06]–[90:41])

Success Outpaces Plan: Hit the original five-year $10M EBITDA target in 18 months, after only seven or eight acquisitions.
Platform CEO Evolution: Steve transitioned from branch manager to full-time Kelso CEO, as partner (Poncho) took over Arizona, showing the importance of developing scalable leadership structure.
- Quote [86:47] Steve Carroll: "I need you to look after Arizona. I can't be in the weeds down here... Somebody has to go do it."
Kelso Becomes a True Operating Company: Hired CFO, developed division support, moved from HoldCo to operational HQ as acquisitions grew (>100 shareholders, regional divisions).

10. Reflections & Advice for ETA/Search Entrepreneurs ([90:41]–[101:01])

Why Not Exit Early?: Saw runway for much more; pivoted from “flipping” to building a long-term, scalable enterprise.
Is This Replicable? Yes—but only if you/your team truly become industry experts, build relationships, and put in the operational hard yards.
- Quote [98:07] Steve Carroll: “You have to become an expert and you have to go nuts about learning, meeting... all of the players in your industry, knowing all of your competition, knowing the numbers, but knowing the people is really important...”
Roadmap for Others: Buy small, operate deeply, then raise outside capital for rollup once you know the business and industry inside-out.
The “Passive Income” Myth: True “absentee ownership” is only possible later and at scale, not at the beginning.
- Quote [100:05] Steve Carroll: “I just encourage everybody to try not to [do a passive approach] ... most searchers don't have hundreds of millions of dollars to just throw at problems.”

Timestamps for Key Segments

| Segment | Time | |--------------------------------------------------------|--------------| | Kelso snapshot and Steve’s background | 07:17–09:35 | | MEP coordination pain point & industry structure | 09:35–15:00 | | Early entrepreneurship journey | 15:00–18:03 | | First small SBA deal—the “passive income” myth | 18:03–29:00 | | Pivot: going larger, Arizona business | 29:00–34:24 | | Raising capital and becoming independent sponsor | 36:44–45:05 | | Closing first deal & personal challenges | 49:57–54:27 | | 100 hr weeks and owner-operator grind | 54:46–63:08 | | Partnership model innovation and first roll-up | 63:08–79:06 | | Accelerated scale; becoming “Platform CEO” | 79:06–90:41 | | Reflecting on replicability, advice for searchers | 90:41–101:01 |

Notable Quotes & Memorable Moments

On the Myth of Passive Small Biz Ownership:
“This entrepreneurship thing is really hard... I can't do this.”
— Steve Carroll [25:32]
On Partnership Model:
“You should partner with us... I have some resources. I have a vision. Can we do this together? 1+1=3.”
— Steve Carroll [65:03]
On Integration Failures:
“If you force an integration too quickly, expect major issues. That's my big, that's my big learning.”
— Steve Carroll [83:39]
On Scaling CEO Role:
“Somebody has to become the platform CEO... and there needs to be a path for the OPCO to be able to sustain with the right leadership and with the right skill and knowledge.”
— Steve Carroll [88:28]
On Replicability of the Model:
“I think you have to earn your stripes... and operate in a space that you choose to be involved in. It shouldn't be a in and out. I'm probably a rare exception where something worked for us fast. But I think the best chance of success is being willing to put in the hundred hours a week and doing that for as long as it takes.”
— Steve Carroll [99:02]
On Building Instead of Flipping:
“If you think you can build a billion [dollar] business, why would you sell out at 10 million or even 20 million of EBITDA?"
— Steve Carroll [94:08]

Summary Table: Kelso Growth Model

| Stage | Approach | Lessons Learned | |-------------------|---------------------------------------------------------|---------------------------------------------------------| | Initial Search | Small SBA deal, hoped for “passive income” | Passive rarely works; must be involved hands-on | | First Big Deal | $17M rev acquisition, raised institutional capital | Understand working capital, go bigger for management | | Operator Phase | 100+ hr weeks, deep in the weeds, family moved to AZ | Gained industry chops, relationships, spotted gaps | | Unlock Model | Partnership/roll-up, owner rolls 20–40% at parent | Flexible, decentralized at first, gradual integration | | Scale | Platform CEO role, build support layers at Holdco/Opco | Support partners, develop regions/divisions | | Result | 31+ acquisitions, $1.2B revenue, 10% EBITDA, 5 yrs | Model replicable with deep industry/operator expertise |

Takeaways & Actionable Wisdom

Operate First: Don't expect to be absentee at the start—get “in the trenches” to learn the business and industry.
Go Large When Possible: Larger businesses have management depth, redundancy, and better processes. Small is tough and risky.
Partnership Over Command-and-Control: Acquisitions work better when owners roll equity, remain invested, and are treated as partners, not subordinates.
Gradual Integration: Light integration at first, heavier lift as scale grows—don’t jam a playbook down early partners’ throats.
Intense Focus = Outsized Gains: Master the industry, build relationships, support your team relentlessly—that’s how the step change happens.
Replicable, If...: This model works elsewhere if you follow the path: operate first, learn deeply, then scale via buy/partner.
Don’t Chase Passive Income Out of the Gate: True “hands-off” comes with scale, not one acquisition.

For aspiring ETA entrepreneurs and searchers, Steve Carroll’s journey is both blueprint and cautionary tale: master your craft and earn the right to scale—then think big.

For more episode summaries & resources: acquiringminds.co

Acquiring Minds: ETA Unicorn — $1 Billion in Revenue in 5 Years

Podcast: Acquiring Minds
Host: Will Smith
Guest: Steve Carroll, CEO & Co-Founder, Kelso Industries
Date: December 4, 2025

Overview

Main Discussion Points & Insights

1. Introduction & Steve Carroll’s Background ([07:17]–[09:35])

Kelso Industries Today: $1.2B revenue, 31+ acquisitions, ~10% EBITDA margins, 3,000 customers, 10,000 annual jobs.
What They Do: Commercial and industrial MEP (mechanical, electrical, and plumbing) services—offering everything from construction to ongoing maintenance nationwide.
Steve’s Personal Path: Grew up working with his hands, studied construction, identified major coordination pain points among MEP trades while working in general contracting.

2. Industry Pain Points & Business Vision ([09:35]–[15:00])

Fragmentation & Complexity: Most MEP companies are < $50M revenue and siloed (electrical, plumbing, HVAC as separate companies). Coordinating among them makes life difficult for property owners, GCs, and building managers.
The Opportunity: Offer an integrated, lifecycle solution to building owners—“the Kelso Flywheel” (from construction to service/maintenance and replacement).
Rare Model: Fully integrated commercial MEP firms are very rare and almost nobody does it at scale ([14:34] Steve Carroll: "Very rare. Very, very, very rare. There's a few players... but nobody does that at scale.").

3. Steve’s Early Career & Entrepreneurial Spark ([15:00]–[18:03])

Walmart Tenure: Learned about culture and leadership at scale; credits Sam Walton’s legacy for influencing Kelso’s people-first culture.
Entrepreneurship Roots: Lifelong entrepreneur, always side-hustling, but kept steady employment for family security.

4. First Acquisition Attempt: Difficulties & Lessons ([18:03]–[29:00])

Initial Plan: Buy a small HVAC business with an SBA loan, keep W2 job, run it “passively.”
Painful Reality: General Manager left pre-close, surprise cash needs, and the myth of “passive” small business ownership quickly fell apart.
- Quote [25:32] Steve Carroll: “This entrepreneurship thing is really hard... I can't do this.”
Key Learning: Passive ownership rarely works; new owners must be hands-on, especially with small, messy businesses.

5. Pivot to Larger, More Sustainable Acquisition ([29:00]–[34:24])

Going Bigger: Decided with partner Steve Nicholson to find the biggest business they could buy using an SBA loan—seeking redundancy, management depth, and process maturity.
Phoenix Opportunity: Identified a $17M commercial HVAC business as target—discovered major working capital shortfalls that upended the deal structure.

6. Raising Institutional Capital: The Inflection Point ([36:44]–[45:05])

From SBA to Independent Sponsor Model:
- Needed more than the $5M SBA ceiling; raised institutional capital through Peterson Partners (Salt Lake City).
- Quote [39:41] Steve Carroll: "We had to expedite our vision... Buying a $2M EBITDA business, we need to show how we're going to grow this to $10M of EBITDA."
- Committed capital for acquisitions, no debt initially—gave flexibility to weather surprises.
Deal Closed: First deal closed in May 2021 (Arizona), Steve’s Achilles ruptured right after, yet he pushed through to onboard and reassure the new team ([51:26] “Missed my flight. Had to get an early flight the next day because I wasn't gonna... mess up the opportunity of a lifetime.”)

7. The Hard Slog: Owner-Operator Realities ([54:46]–[63:08])

100+ Hour Weeks: Steve (and Nicholson) ran the business hands-on, immersing in all aspects: hiring/firing, sales, cash management; family moved months later.
- Quote [57:14] Steve Carroll: "I'm in there at 4:35am every day when the shop opens and I'm the last person there. I go home, see my family for a little bit and then I work on, on the business the rest of the night."
Management Gaps: Lacked true management depth, no escape from day-to-day trenches.
Failed “Jamming In” Attempt: Simultaneously tried to buy other firms and “jam” them into their existing business—didn’t work well.

8. The Unlock: Partnership Model ([63:08]–[79:06])

Key Innovation: Instead of just acquiring and absorbing, Kelso began partnering with business owners, letting them roll 20–40% equity into the parent (Kelso) and remain as autonomous leaders.
Founding the Model: Pitched (successfully) to a larger Idaho HVAC owner—become part of Kelso, pursue bigger vision together, and access growth resources.
- Quote [65:03] Steve Carroll (on the pitch): “You should partner with us... I have some resources. I have a vision. Can we do this together? 1+1=3.”
Flexible Integration: Decentralized at first, light-touch partnership, more integration over time as scale demanded. Focused on respect, autonomy, and mutual benefit.
Standalone Platforms: Avoid full “jamming” on day one; let new companies act as platforms, integrating backend and support functions gradually.
Integration Wisdom:
- Quote [83:39] Steve Carroll: “If you force an integration too quickly, expect major issues. That's my big learning.”

9. Scaling: Explosive Acquisition Trajectory ([79:06]–[90:41])

Success Outpaces Plan: Hit the original five-year $10M EBITDA target in 18 months, after only seven or eight acquisitions.
Platform CEO Evolution: Steve transitioned from branch manager to full-time Kelso CEO, as partner (Poncho) took over Arizona, showing the importance of developing scalable leadership structure.
- Quote [86:47] Steve Carroll: "I need you to look after Arizona. I can't be in the weeds down here... Somebody has to go do it."
Kelso Becomes a True Operating Company: Hired CFO, developed division support, moved from HoldCo to operational HQ as acquisitions grew (>100 shareholders, regional divisions).

10. Reflections & Advice for ETA/Search Entrepreneurs ([90:41]–[101:01])

Why Not Exit Early?: Saw runway for much more; pivoted from “flipping” to building a long-term, scalable enterprise.
Is This Replicable? Yes—but only if you/your team truly become industry experts, build relationships, and put in the operational hard yards.
- Quote [98:07] Steve Carroll: “You have to become an expert and you have to go nuts about learning, meeting... all of the players in your industry, knowing all of your competition, knowing the numbers, but knowing the people is really important...”
Roadmap for Others: Buy small, operate deeply, then raise outside capital for rollup once you know the business and industry inside-out.
The “Passive Income” Myth: True “absentee ownership” is only possible later and at scale, not at the beginning.
- Quote [100:05] Steve Carroll: “I just encourage everybody to try not to [do a passive approach] ... most searchers don't have hundreds of millions of dollars to just throw at problems.”

Timestamps for Key Segments

Notable Quotes & Memorable Moments

On the Myth of Passive Small Biz Ownership:
“This entrepreneurship thing is really hard... I can't do this.”
— Steve Carroll [25:32]
On Partnership Model:
“You should partner with us... I have some resources. I have a vision. Can we do this together? 1+1=3.”
— Steve Carroll [65:03]
On Integration Failures:
“If you force an integration too quickly, expect major issues. That's my big, that's my big learning.”
— Steve Carroll [83:39]
On Scaling CEO Role:
“Somebody has to become the platform CEO... and there needs to be a path for the OPCO to be able to sustain with the right leadership and with the right skill and knowledge.”
— Steve Carroll [88:28]
On Replicability of the Model:
“I think you have to earn your stripes... and operate in a space that you choose to be involved in. It shouldn't be a in and out. I'm probably a rare exception where something worked for us fast. But I think the best chance of success is being willing to put in the hundred hours a week and doing that for as long as it takes.”
— Steve Carroll [99:02]
On Building Instead of Flipping:
“If you think you can build a billion [dollar] business, why would you sell out at 10 million or even 20 million of EBITDA?"
— Steve Carroll [94:08]

Summary Table: Kelso Growth Model

Takeaways & Actionable Wisdom

Operate First: Don't expect to be absentee at the start—get “in the trenches” to learn the business and industry.
Go Large When Possible: Larger businesses have management depth, redundancy, and better processes. Small is tough and risky.
Partnership Over Command-and-Control: Acquisitions work better when owners roll equity, remain invested, and are treated as partners, not subordinates.
Gradual Integration: Light integration at first, heavier lift as scale grows—don’t jam a playbook down early partners’ throats.
Intense Focus = Outsized Gains: Master the industry, build relationships, support your team relentlessly—that’s how the step change happens.
Replicable, If...: This model works elsewhere if you follow the path: operate first, learn deeply, then scale via buy/partner.
Don’t Chase Passive Income Out of the Gate: True “hands-off” comes with scale, not one acquisition.

For aspiring ETA entrepreneurs and searchers, Steve Carroll’s journey is both blueprint and cautionary tale: master your craft and earn the right to scale—then think big.

For more episode summaries & resources: acquiringminds.co

ETA Unicorn: $1 Billion in Revenue in 5 Years

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Summary

Acquiring Minds: ETA Unicorn — $1 Billion in Revenue in 5 Years

Overview

Main Discussion Points & Insights

1. Introduction & Steve Carroll’s Background ([07:17]–[09:35])

2. Industry Pain Points & Business Vision ([09:35]–[15:00])

3. Steve’s Early Career & Entrepreneurial Spark ([15:00]–[18:03])

4. First Acquisition Attempt: Difficulties & Lessons ([18:03]–[29:00])

5. Pivot to Larger, More Sustainable Acquisition ([29:00]–[34:24])

6. Raising Institutional Capital: The Inflection Point ([36:44]–[45:05])

7. The Hard Slog: Owner-Operator Realities ([54:46]–[63:08])

8. The Unlock: Partnership Model ([63:08]–[79:06])

9. Scaling: Explosive Acquisition Trajectory ([79:06]–[90:41])

10. Reflections & Advice for ETA/Search Entrepreneurs ([90:41]–[101:01])

Timestamps for Key Segments

Notable Quotes & Memorable Moments

Summary Table: Kelso Growth Model

Takeaways & Actionable Wisdom

For aspiring ETA entrepreneurs and searchers, Steve Carroll’s journey is both blueprint and cautionary tale: master your craft and earn the right to scale—then think big.

Summary

Acquiring Minds: ETA Unicorn — $1 Billion in Revenue in 5 Years

Overview

Main Discussion Points & Insights

1. Introduction & Steve Carroll’s Background ([07:17]–[09:35])

2. Industry Pain Points & Business Vision ([09:35]–[15:00])

3. Steve’s Early Career & Entrepreneurial Spark ([15:00]–[18:03])

4. First Acquisition Attempt: Difficulties & Lessons ([18:03]–[29:00])

5. Pivot to Larger, More Sustainable Acquisition ([29:00]–[34:24])

6. Raising Institutional Capital: The Inflection Point ([36:44]–[45:05])

7. The Hard Slog: Owner-Operator Realities ([54:46]–[63:08])

8. The Unlock: Partnership Model ([63:08]–[79:06])

9. Scaling: Explosive Acquisition Trajectory ([79:06]–[90:41])

10. Reflections & Advice for ETA/Search Entrepreneurs ([90:41]–[101:01])

Timestamps for Key Segments

Notable Quotes & Memorable Moments

Summary Table: Kelso Growth Model

Takeaways & Actionable Wisdom

For aspiring ETA entrepreneurs and searchers, Steve Carroll’s journey is both blueprint and cautionary tale: master your craft and earn the right to scale—then think big.