Andy Rougeot: From the Battlefield to a $9 Million Blue-Collar Business Exit

The traditional path for a newly minted HBS MBA with a military background often leads straight to a top-tier management consulting firm. Andy Rougeot walked that path, spending a summer at McKinsey & Company. But a single incident altered his trajectory entirely.

During a site visit, a local bus driver politely handed his resume to a McKinsey recruiter, expressing an earnest desire to join the team. After the driver stepped away, the recruiter openly mocked the man for thinking he was good enough to join their ranks.

"It really put a sick feeling in my stomach," Andy Rougeot said in an appearance on the Acquiring Minds Podcast. "I think the cool thing about search is you really get to build a culture inside the company you buy. So if you're buying a blue-collar business... you can have a really big impact on those people's lives through higher wages, introducing benefits, and just being a good boss."

Choosing Main Street over Wall Street, Rougeot launched a self-funded search that led to the acquisition of a self-storage gate repair business. Five years later, he had scaled the company across the West Coast, exiting for $9 million in cash to run for Mayor of Denver.

Before HBS, Rougeot served as an Army Intelligence Officer, deploying overseas with the Rangers to protect Kabul from suicide bombing attacks, and later running a drone unit. This experience forged a leadership philosophy perfectly suited for Entrepreneurship Through Acquisition.

In the military, a 22-year-old junior officer is routinely placed in charge of a platoon of experienced, hardened soldiers. The officer possesses legal authority, but moral authority must be earned. Rougeot argues that this dynamic mirrors the experience of a young searcher stepping into a 30-year-old blue-collar business.

To bridge the gap between legal and moral authority, military leaders are taught a simple tenet: find the dirtiest, most miserable job, and do it alongside your team.

"I think veterans just have that gut instinct of like, if I don't know what to do, find the dirtiest, sweatiest job and go do that," Rougeot says, adding "That building credibility from the employee base is when you make another stupid decision... they give you a little bit more grace on that if they know that you're covered in grease and you're out there on the sweatiest day versus you were in the air-conditioned office."

Because Rougeot’s wife worked in the ski industry, he conducted a geographically constrained search focused entirely on the Denver metro area. Utilizing a team of interns working out of the Denver Public Library, he executed a mass email campaign targeting local business owners.

Within two months, his outreach triggered the owner of RG Maintenance to hire a broker, turning a proprietary lead into a brokered process.

The Business Profile:

Despite the attractive margins and robust cash flow, the deal had significant "hair" that scared away other buyers.

First, the owner was heavily entrenched in the day-to-day operations. He utilized a "hub-and-spoke" leadership model, fielding calls all day from his 11 technicians to dictate how to fix specific mechanical issues, while also operating as the company's sole estimator and salesperson.

Second, the business had high customer concentration. Public Storage, a massive national Real Estate Investment Trust (REIT), accounted for over 50% of RG Maintenance’s revenue. However, Rougeot interrogated this risk and discovered a critical nuance between payor risk and decision-maker risk.

While the checks all came from a single corporate entity, the actual purchasing decisions were dispersed across seven different district managers and construction executives. "As long as I am not doing something unethical, but I'm just providing poor work quality, the worst I could do is I could lose one of those seven people," Rougeot shares.

To mitigate the immense key-person risk tied to the outgoing founder, Rougeot negotiated a six-month transition period utilizing a military training framework known as "left-seat, right-seat."

During the first phase, the seller drove the business (left seat) while Rougeot observed (right seat). In the second phase, Rougeot took the wheel while the seller watched and critiqued. In the final phase, Rougeot operated independently, with the seller available by phone for emergencies.

Rougeot embraced the operational grit of the business. While many searchers try to extract themselves from field work immediately to focus on high-level strategy, Rougeot leaned in. He spent days unloading 60-pound bags of concrete and mixing them on job sites. He loved the tangible satisfaction of manual labor, even if it meant waking up before dawn to manage his spreadsheets and administrative duties.

Rougeot’s initial growth hypothesis was vertical expansion. He assumed that since his technicians knew how to fix self-storage gates, they could easily fix gates for apartment complexes and Homeowner Associations (HOAs). He spent 2018 trying to penetrate this market but quickly realized the aesthetic and operational demands of HOAs were entirely different from the purely functional needs of a storage facility. It was a saturated, highly competitive market where RG Maintenance had no unique edge.

Realizing the vertical pivot had failed, Rougeot pivoted to geographic expansion. He approached his biggest client, Public Storage, and asked a simple question: "Where is your worst provider in the country?"

The answer was Portland, Oregon.

Rougeot promised Public Storage the exact same pricing and quality they received in Colorado if they gave him the Oregon market. With a warm lead secured, he hired a former Marine crew chief to act as the General Manager in Portland. Because fixing specialized access keypads requires a steep four-month learning curve, Rougeot subsidized the new GM's training. If a job took the new, inexperienced technician three hours instead of the standard 90 minutes, Rougeot only billed the client for 90 minutes.

The strategy worked perfectly. By the end of its first year, the Oregon branch hit $300,000 in revenue. By 2022, it matched the size of the original Colorado operation, generating $600,000 in EBITDA.

Having proven the model, Rougeot simply rinsed and repeated. He went back to his national clients, asked where they were experiencing the most pain, and marched down the West Coast. By 2022, RG Maintenance was operating in five markets: Colorado, Oregon, the Bay Area, Washington, and Arizona.

By early 2022, RG Maintenance had grown to $9 million in revenue, $1.7 million in EBITDA, and roughly 40 employees. Rougeot had a clear playbook to double the business again over the next five years.

However, a personal calling intervened. Frustrated by the rising crime and homelessness in Denver — highlighted by a disturbing encounter in a public park while holding his two-year-old daughter — Rougeot decided to run for Mayor of Denver.

Recognizing he couldn't run a mayoral campaign and a multi-state blue-collar business simultaneously, he decided to exit. After listing the business online, a fellow searcher introduced him to a Los Angeles-based private equity firm looking to execute a rollup in the space.

In July 2022, Rougeot sold RG Maintenance for $9 million in an all-cash transaction, roughly 5.5x EBITDA. He transitioned out just in time to welcome his second daughter and launch his grassroots political campaign, which famously involved waking up at 4:00 AM to shovel strangers' driveways in exchange for votes.

He ultimately placed fourth out of seventeen candidates, securing a respectable 11.5% of the vote.

Today, Rougeot channels his ETA expertise into the investing side of the table. Since selling his business, he has made 26 personal investments, primarily in self-funded search deals.

More recently, he launched a fund dedicated to Search Fund Secondaries — a novel concept in the ETA space. His fund provides liquidity to earlier investors or operators who need to exit their positions before a company undergoes a full sale.

Rougeot favors this model because it fundamentally de-risks the investment. "I think the biggest risk is the day you buy the business because... a lot of [the horror stories] are driven by fraud or bad diligence," Rougeot says. "If we're buying a secondary position... that has been at least a year owned by the current operator, we have a pretty good idea that those risks don't exist."

By cutting off the volatile front-end risk of year one, Rougeot believes secondaries offer a very attractive, stabilized return profile.