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

Podcast: Acquiring Minds

Published: 2025-12-04

Duration: 1 hr 42 min

Summary

Steve Carroll transformed a traditional business acquisition strategy into a billion-dollar venture by focusing on strategic roll-ups in the commercial HVAC sector. His journey exemplifies how innovative thinking and adaptability can lead to extraordinary growth.

What Happened

In this episode, host Will Smith speaks with Steve Carroll, co-founder and CEO of Kelso Industries, who successfully scaled his company to over $1.2 billion in revenue within just five years. Initially, Steve's plan was modest; he intended to buy a business using an SBA loan and grow it steadily. However, after acquiring his first business, he quickly realized that to achieve greater growth, a shift in strategy was needed. This pivotal moment led to a series of acquisitions that dramatically accelerated the company’s expansion.

Steve shared that the transition from operating a single business to rolling up multiple acquisitions was a significant inflection point. His first acquisition involved him working long hours, often up to 100 hours a week, which made it challenging to envision growth. However, after his partner and he decided to refine their acquisition model, they found a formula that not only worked but also propelled them to achieve $10 million in EBITDA in just a year and a half—much faster than their initial five-year target. As of November 2025, Kelso Industries has expanded to 31 acquisitions, positioning itself as a leader in the commercial mechanical, electrical, and plumbing (MEP) services market.

Key Insights

Key Questions Answered

How did Steve Carroll achieve $1 billion in revenue so quickly?

Steve Carroll's rapid ascent to $1 billion in revenue was largely due to a strategic pivot after his first acquisition. Initially, he grappled with the demands of running a single business, which limited his ability to think about growth. However, upon realizing that a refined acquisition model could yield better results, he and his partner adjusted their strategy. This shift allowed them to scale quickly, and they reached $10 million in EBITDA in just a year and a half, far exceeding their original five-year goal.

What business model did Steve Carroll refine for his acquisitions?

The business model that Steve Carroll refined involved moving from a single operational focus to a more expansive roll-up strategy for acquisitions. This change was a significant unlock for their growth, enabling them to acquire multiple companies and integrate them under the Kelso Industries umbrella. By focusing on commercial and industrial mechanical, electrical, and plumbing services, they capitalized on the synergies between the acquired entities, allowing for streamlined operations and enhanced service offerings.

What challenges did Steve face during his first acquisition?

During his first acquisition, Steve Carroll faced immense challenges, including overwhelming workloads and operational bottlenecks. He described his experience as 'drowning,' having to work 100-hour weeks while trying to manage the business. This intense pressure made it difficult for him to step back and envision a growth strategy. It wasn't until he and his partner reassessed their approach that they were able to find a model that would support expansion and leverage the strengths of the businesses they were acquiring.

What is the significance of EBITDA in Steve's business strategy?

EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, plays a crucial role in Steve's business strategy as it serves as a key performance indicator of operational profitability. Initially, Steve aimed for $10 million of EBITDA over five years, but achieving this goal in just a year and a half was a game changer. It validated their acquisition strategy and provided the financial metrics necessary to attract further investment and support the rapid growth of Kelso Industries.

How can entrepreneurs apply Steve Carroll's lessons to their own businesses?

Entrepreneurs can learn several valuable lessons from Steve Carroll's journey. One key takeaway is the importance of being adaptable and willing to refine one's business model based on initial experiences. Additionally, understanding operational efficiency and how to manage multiple acquisitions can lead to significant growth. Lastly, setting ambitious yet realistic financial goals, as well as being open to innovative strategies, can help entrepreneurs unlock potential that they may not have initially considered.