Acquiring Minds: "SBA Acquisition to $9m Cash Exit in 5 Years" with Andy Rougeau

Podcast: Acquiring Minds
Host: Will Smith
Guest: Andy Rougeau (former owner, RG Maintenance / GP at Search Fund Secondaries Group)
Date: December 8, 2025

Episode Overview

In this episode, Will Smith sits down with Andy Rougeau, a former Army officer and Harvard MBA who became a self-funded search entrepreneur, scaling a blue collar business from $2.5M to $9M in revenue before executing a successful private equity exit—all within five years. They discuss Andy's journey from acquisition through operational improvements and aggressive geographical expansion, the lessons learned about leadership, and the unique playbook he developed to stand up new markets. Andy also shares insights and data from his 26 self-funded search investments since his own exit, analyzing trends in returns, risk, and multiples in the ETA (Entrepreneurship Through Acquisition) space. The conversation is honest, tactical, and peppered with practical advice for acquisition entrepreneurs.

Background: Who is Andy Rougeau?

[06:33–09:57]

• Military Roots: Andy started as an Army Intelligence officer (with the Rangers, stationed in Kabul).
• Harvard MBA: Enrolled after his service, initially considered consulting, briefly worked at McKinsey but was put off by the culture.
• Introduction to ETA: Discovered entrepreneurship through acquisition (ETA) as a business school student.
  • Memorable Quote:

    "The cool thing about search is you get to build a culture inside the company you buy. If you're buying a blue collar business, you can have a really big impact on those people's lives." – Andy [08:21]

Deciding to Search: The Path to ETA

[09:57–16:10]

• Andy sought to stay in Denver for family reasons, necessitating an industry-agnostic, geographically focused self-funded search.

• As a veteran, he felt well-equipped for blue collar leadership given military experience with authority, moral leadership, and humility.

  • Memorable Quote:

    “If you don't know what else to do, find a dirty, thankless job and go do that.” – Andy [12:51]

The Search Process and Acquisition of RG Maintenance

[16:10–21:47]

• Deal Origination: Sourced via direct owner outreach and brokered channels, with help from interns and state databases.
• Business Profile: RG Maintenance repaired gates and access controls (i.e., electronic security gates) for self-storage facilities:
  • $2.5M revenue, $725k EBITDA, 12 employees (11 techs, 1 office staff)
  • 95% market share in a niche, highly recurring, low-cyclicality revenue tied to storage industry tailwinds
  • Risks: Customer concentration, cyclical construction revenue, owner-centric operations
• Acquisition Price: 3.25x EBITDA (about $2.36M purchase price)
  • Memorable Quote:

    “…the seller was heavily involved. His phone was ringing off the hook…he created a hub and spoke leadership model, which limited his overall size.” – Andy [19:30]

• Owner wanted to retire and relocate, making the timing right.

Navigating "Hairy" Deals, Customer Concentration, and Pricing Risk

[21:47–30:43]

• Competition in the deal arose once the seller hired a broker.

• Customer concentration (>50% revenue from Public Storage) was mitigated by the practical dispersion of decision-makers at the customer.

• Andy negotiated a six-month owner transition for operational handover and shadowed activities to learn technical and sales roles.

  • Notable Dialogue:

    "One investor said this business only would make sense if you were buying it for 2.25x based off that customer concentration." – Andy [29:49]

  • Discussion emphasized deeply diligencing not just payer risk, but also decision-maker risk within big customers.

Transition, Leadership, and the First Year Post-Acquisition

[30:43–40:00]

• Andy embraced "left seat, right seat" transition—first watching, then doing with backup, then operating solo with remote support.

• He personally absorbed key operational roles, enjoying field work, but reflected that he may have leaned too much into hands-on work over higher-level management.

• Early challenges included rooting out employee fraud and substance abuse, dealing with lack of inventory controls, and firing problematic staff.

• Discussed the need for new owners to balance asserting authority with humility and earning credibility with frontline crews.

  • Memorable Quote:

    “If you show favoritism towards an employee, they're going to be nicer to you to the face than behind your back. I think you have to treat them as people you care deeply about, but don't try to get your friend base from your company.” – Andy [36:54]

Growth and Geographic Expansion: The RG Playbook

[45:50–58:22]

• Initial failed vision: Expanding to similar gate work outside self-storage struggled due to technical and market differences.

• Pivoted to geographical expansion at the behest of existing self-storage customers seeking better vendors in other states.

  • Asked top customer where service was worst, then entered that market (Oregon) with a local GM and technician, training in Colorado.

  • Replicated the model in the Bay Area, Washington, and Arizona, each time using customer warm leads.

  • Market launches required low capex but involved heavy people investment (hiring/training military vets as GMs).

  • Memorable Exchange:

    "We didn’t try to knife fight great vendors…we just went where the customer said, 'my current vendor is terrible—can you please come here?'" – Andy [51:14]

• Most important success factors:

  • Trustworthy GMs with servant leadership, often military veterans
  • Technical training, flexibility, and willingness to accept “player-coach” roles
  • Risk appetite balanced by personal guarantee (SBA loan)

Lessons for Blue Collar ETA: Replicability and Limitations

[58:22–61:03]

• Andy believes his expansion playbook is replicable in blue collar spaces but hinges on:
  • Finding/empowering exceptional local GMs
  • Trade learning curve—easier when the skill is learned in months, not years
  • Appetite and capability for “lean” organic launches vs. higher cost acquisitions in traditional trades

Exit: Sale to Private Equity

[61:03–65:01]

• 2022 snapshot: $9M revenue, $1.7M EBITDA, 40+ employees across five markets.

• Decision to sell was driven by a career/life pivot—running for mayor of Denver.

• Tried strategic buyers and listing online; ultimately, a connection with a PE group via a searcher led to a $9M all-cash exit (5.3x EBITDA, subject to debt/vehicles), with PE wanting full ownership, not a founder rollover.

• Notably, Andy received no outreach from the searcher community even though his business fit ideal acquisition criteria.

  • Memorable Story:

    “I ran for mayor of Denver and came in fourth out of 17. I figured I could have an impact.” – Andy [61:39 // 65:02]

Use of Proceeds & New Chapter: Search Investing

[67:38–79:54]

• Since 2022, Andy has directly invested ~$4M across 26 mostly self-funded ETA deals (“primaries”) with another fund dedicated to secondaries.
• Shares actual portfolio performance, countering recent academic pessimism about ETA returns:

  • 7 exits: five were 3x–27x returns, two were zeros (fraud, industry headwind)

  • Across all, realized and unrealized returns cluster around 3x MOIC

  • Key Insights:

    • Exit multiples typically exceed entry multiples (“never invested where exit didn’t see moic expansion”)
    • Searchers rarely improve margins, despite intentions (often assign more SG&A, raise wages, make businesses more robust)
    • Geographies over-represented in portfolio reflect Andy’s network (Colorado, coasts)

  • Memorable Discussion:

    “I think there is still a ton of great deals and very niche spaces that are a great fit for a searcher…and there’s a lot of room to run in the space” – Andy [79:54]

Search Fund Secondaries: Providing Liquidity to ETA Investors

[81:13–86:33]

• Andy's fund offers liquidity to LPs and operators in search who experience unexpected needs for capital—buying out positions after holding periods.

• Thesis: Most existential risks (fraud, bad diligence) reveal themselves within the first year, so buying in after year one reduces tail risk, albeit with lower chances of hitting mega-multiples.

• Process is win-win: divesting LPs get cash, new investors get de-risked holdings.

  • Memorable Insight:

    “If there’s a business…where there has been massive EBITDA inflation through hiding costs, or the seller knew the biggest customer was leaving, that is uncovered within a year. If we’re buying a secondary after that, we have a pretty good idea those risks don’t exist.” – Andy [82:38]

Notable Quotes & Timestamps

• "If you don't know what else to do, find a dirty, thankless job and go do that."
  — Andy Rougeau [12:51]
• "We never really tried…to enter a knife fight against a good vendor."
  — Andy Rougeau [51:14]
• "I've never invested in a deal where the exit hasn't seen MOIC expansion…We are very hesitant as investors to underwrite into expanded EBITDA multiples, but that's the reality."
  — Andy Rougeau [75:19]
• “I still think this is a great path. Sometimes there's more pessimism these days…there’s still a ton of great deals and very niche spaces that are a great fit for a self-funded searcher.”
  — Andy Rougeau [79:19, 79:54]
• "If there’s a business where there has been massive EBITDA inflation through hiding costs…that is uncovered within a year. If we’re buying a secondary position…we have a pretty good idea those risks don’t exist."
  — Andy Rougeau [82:38]

Key Takeaways

Andy’s Playbook for Blue Collar Growth

• Deep diligence on owner involvement and customer concentration/decision-maker risk
• Emphasis on humble, servant leadership and “earning” credibility
• Geographic expansion via existing customer networks is highly effective
• High ROI in replicable, specialized technical services for narrow verticals
• Hiring and empowering talented, adaptable local GMs critical for remote launches

On Search Investing

• Self-funded search investing remains resilient, producing clustered 3x outcomes, especially via buying cheaper deals (<5x EBITDA)
• Entry-to-exit multiple expansion is a real, common outcome, despite investors' conservatism
• Most early-stage search “zeros” are revealed within the first year (fraud, undetected headwinds)

On Exit & Market

• Robustify the business, but don’t over-index working “in” rather than “on” the business past Year 2
• There’s more supply of good deals than many claim, especially in niche verticals
• PE buyers may prefer all-cash exits for full ownership, even if ex-founder wants to roll equity

Where to Find Andy Rougeau

• LinkedIn – Connect for advice (especially if you’re a military veteran operator), investing opportunities, or to discuss liquidity needs for ETA investors.

Additional Resources

• Andy’s September ’25 webinar: "Liquidity Options for Search Investors" — available at acquiringminds.co/webinars
• See Andy’s anonymized portfolio spreadsheet: available upon direct request

For more deep dives into acquisition entrepreneurship, subscribe to Acquiring Minds and check out the YouTube channel.