Built to Sell Radio
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PodcastBuilt to Sell Radio
Publisher/creatorJohn Warrillow
Published
Shortcast updated
About this episode
Some of the richest founders don't run trendy companies. They run dirty ones. The kind of work you'd never brag about at a dinner party, but that quietly throws off real money because it's hard, risky, and most people won't do it. This Built to Sell Radio episode follows Sh e nar Wood , who built an underground power business by taking on personal risk, earning trust job by job, and eventually selling when he hit a ceiling that had nothing to do with demand, you discover how to : Recognize the hidden ceiling that has nothing to do with demand and everything to do with your balance sheet Stop confusing "more revenue" with "more value" when margin and risk aren't improving Build a reputation flywheel where customers feed you better work because they trust how you operate Separate assets from value so you don't overestimate what a buyer will pay for "stuff" Fix the financial story before a buyer forces an expensive cleanup under pressure Negotiate earn-out terms so the buyer can't hit your results by moving costs onto your books Decide when it's smarter to sell now than grind for years just to add a rounding error to valuation
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Episode summary
Welcome back to Built to Sell Radio, where we help you punch above your weight when it’s time to sell. Today’s story is about making real money in unglamorous work and what it takes to spot the ceiling on growth, build a trust flywheel, clean up your financial story, and protect your earn‑out.
Shenar Wood built an underground power company by taking on risk, earning trust one job at a time, and selling when the barrier wasn’t talent but the balance sheet. How did you get into burying power lines?
It’s not sexy, but I learned directional drilling while paying for college, did flight school, then left and bought a drill on a personal guarantee to start taking subcontracts.
For listeners picturing it, undergrounding means you’re drilling under streets and yards to pull cable, swap transformers, and remove poles. How risky is that and who hires you?
It’s dangerous, so training and safety drive everything; we worked for investor‑owned utilities, cities, and co‑ops, drilling a couple hundred feet at a time and minimizing surface damage.
How did you fund the first rig and survive the cash cycle early on?
The first new drill was around the mid‑hundreds with support gear taking it near a quarter million, I signed personally and floated net‑thirty with help from my brother.
How did you win work and move beyond thin sub margins?
We started as a sub on small jobs the big players ignored, built a reputation, then bid RFPs as a prime where gross could hit the mid‑forties even as safety, insurance, and maintenance raised OPEX.
What sizes were typical, and what’s an IOU?
City jobs could be under a few hundred thousand, while utility programs climbed into the millions; IOUs are investor‑owned utilities like Duke and Southern Company.
How did you protect quality as you scaled, and did you face corner‑cutting pressure?
We built a culture that explains the why, involves the crew, and ties workmanship to inspections and future work, because safety lapses kill margins and careers.
Union or non‑union, and did that shape competitiveness?
We ran non‑union in the Southeast where unions are less dominant; hourly pay was competitive even if benefits differ, and pricing stayed sharper.
What was the biggest obstacle on your path to roughly five million in revenue?
We hit the surety wall as debt stacked up; becoming the prime helped, but bonding companies disliked our leverage, equipment prices doubled post‑COVID, and contracts only offered small escalators.
How did the personal guarantees and family dynamics factor in?
My wife ran HR and saw every document, and the daily pressure was real; in this business, contracts matter far more than owning trucks and drills.
Where did margins land and when did you pin down value?
Gross hovered near forty percent but debt pulled net into the low teens; after an MBA and a full GAAP rebuild of three years of books, we saw a value band around five to ten million at roughly four to six times EBITDA.
Why sell, and how did the process play out?
We needed five to ten million of growth capital we couldn’t access, so a broker quietly shopped the deal; two bidders leaned in, and we chose a parent that did overhead power and wanted our underground, non‑union Southeast footprint.
How was it structured, and what about debt and assets?
It was a stock deal with enough upfront to clear all debt, no extra premium for iron, and roughly thirty percent in an earn‑out.
What did you negotiate hardest in the earn‑out?
We nailed down EBITDA definitions, capex plans, and pushdown costs so new equipment and back‑office salaries wouldn’t sink our targets, and we added revenue incentives without chasing bad jobs.
How long did diligence take, and did anyone retrade?
From LOI to close took about seven months, the buyer dug deep into contracts and books, and they stayed true to the deal.
Give us the emotional high and the low.
When the wire hit on a Friday in December it felt like a decade of strain was validated and the debt weight lifted; the hard part is seeing the brand on trucks that aren’t mine, even though they kept the name and growth took off with capital.
One thing you wish you’d known sooner.
Start the sale prep early and fix your books, and if EBITDA won’t move meaningfully, don’t grind five more years for a tiny valuation bump.
Any guiding principles that helped you decide?
Build a balance‑sheet fortress, keep debt to revenue near three to one so sureties back you, and you’ll be positioned to accelerate out of rough patches.
What did you buy to mark the win, and where can people find you?
I picked up a Rolex Submariner and a Moser Streamliner because watches bookmark moments you can pass on; I post on LinkedIn under Shenar Wood.
You’ll find links in the show notes at builttosell.com. Thanks for listening, and we’ll see you next week.
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