An Army sergeant who went on to run three private equity-backed companies, buy 58 businesses, and return $2.5 billion to investors tells founders where they stall, why it happens, and what to fix before they sell: the unit, the org chart, the balance sheet, and the books.
Adam Coffey describes his start as a guy in a truck. He served as a sergeant in the U.S. Army, then landed at General Electric when it was the most admired company in the world and the best management training ground a young operator could ask for. He became a turnaround specialist there, and then spent twenty-one years as CEO of three national service companies backed by nine different private equity sponsors. Along the way he bought 58 companies and delivered $2.5 billion in exits, including the billion-dollar sale that, as he tells Doug Foley, changed how he saw the whole game.
The first thing he corrects is what founders measure. Revenue growth is the number everyone quotes and the wrong one to run a business on. The number that matters is what a single unit earns, one truck, one crew, one branch, because a business is just that unit repeated. The math scales in both directions, which is why the phrase is fix one truck, fix 6,000. The benchmark he uses is the 30-20-10 rule: thirty percent gross margin, twenty percent overhead, ten percent net profit. A founder who cannot see those three numbers clearly does not know whether the business is healthy or merely busy.
Then he explains the stall. Founders get stuck somewhere between $10 million and $30 million in revenue, and it is rarely the market that stops them. It is the fact that the business still runs through one person. He talks about loyalty traps, the early employees who were there at the beginning and have quietly become the ceiling on what the company can do, and about the 30:1 manager ratio that tells you when a layer of leadership is overdue. The shift he describes is from first chair to conductor. The founder who insists on playing every instrument will never get the orchestra past a certain size.
The middle of the conversation is about money, and he starts by saying growth is expensive. Self-funding it is possible, but it is slow, and it means the founder carries all of the risk while the company holds all of their net worth. That is where private equity enters, and Adam spends real time taking apart the myths. What a buyout fund actually is, how it makes money, and what it needs from the operator. Why selling a minority stake, which looks like the cautious option, can end up costing a founder more than they expect. And the Rule of 130, his test for whether a founder’s net worth is dangerously concentrated in a single illiquid asset.
He also argues that money is a separate expertise. Being good at running a business does not make you good at raising capital for one, and the founders who do it well treat money better than it is used to being treated. That is a discipline, not a slogan, and it compounds. His proof is a thesis: a well-written document that raised $100 million from investors before a single company had been bought, because the plan itself was investable. He is equally clear about the other side of that. There are deals he rejects inside five minutes, and he explains what those founders got wrong before they ever walked into the room.
He closes on the exit, and on the twelve months before it. Most founders start preparing to sell when they decide to sell, which is a year too late. A sell-side quality of earnings report, done before a buyer commissions their own, surfaces the problems while there is still time to fix them. Moving from cash to accrual accounting turns a set of books a buyer has to argue with into a set of books a buyer can underwrite. And understanding which EBITDA multiple your business will actually trade at, rather than the one quoted from a conference stage, sets the expectation the whole process runs on. He makes it concrete with one founder’s story: $500,000 in profit to a $31 million offer in two years.
The last lesson is the shortest. Every company he built was built by ordinary people who decided to do it, and the only real question he leaves founders with is why not you.
If you run a service business or a blue-collar company and want to scale past $10 million, work with private equity, or plan your exit, this is the playbook.
In this episode: the billion-dollar exit that changed everything, from Army sergeant to GE turnaround specialist, fix one truck and you fix 6,000, why founders stall between $10 million and $30 million, loyalty traps and the 30:1 manager ratio, the 30-20-10 rule for gross margin, overhead, and net profit, why growth is expensive and the limits of self-funding versus private equity, the truth about private equity and buyout funds, the Rule of 130 and diversifying your net worth, why selling a minority stake can cost you, why money is a separate expertise, treating money better than it is used to being treated, how a thesis raised $100 million with no company attached, the deals Adam rejects in five minutes, what to fix twelve months before selling your business, sell-side quality of earnings and accrual accounting, where to find Adam Coffey, why not you, and the founder who went from $500,000 in profit to a $31 million offer in two years.
Disclaimer: All expressions of opinion in this podcast are subject to change without notice and are not intended to be a forecast of future events or results. There is no assurance that any trends discussed will continue or that any projections will be met.