Eric Hayes·September 18, 2023

Leaving a Big Salary in DC for Small Business in Wyoming | Eric Hayes Interview

Eric Hayes spent his career as a heavy civil construction executive, culminating as project executive for Walsh Construction on the $500m Frederick Douglass Memorial Bridge in Washington DC. Motivated by a desire to build generational wealth, create long-term employee relationships, and increase charitable giving, he structured an independent sponsor deal to acquire Rocky Mountain Reclamation, a revegetation and land reclamation contractor founded in 1979 and based in Laramie, Wyoming. The business — doing ~$7m in revenue at ~20% EBITDA margins — specializes in restoring native plant ecosystems to disturbed land from mining, renewable energy, highway, and pipeline projects across seven Mountain West states. Eric paid slightly below 4x EBITDA, financing through an SBA loan, a seller note (negotiated only after struggling to raise equity), and a $2.2m equity raise from individual investors and one agricultural institutional fund, contributing $600k of his own family capital. His construction background proved essential for pricing, estimating, and contract management, but he faced real challenges leading a tight-knit, autonomous field crew as a technical outsider, managing project-based revenue with no backlog visibility, and adjusting to small-town Wyoming life after Northern Virginia.

Deal facts

multiple: slightly below 4x EBITDA
sde ebitda: ~$1.4m EBITDA (20% margins on ~$7m revenue)
revenue: $7m
financing structure: SBA loan + seller note (negotiated after initial resistance) + equity raise from individual investors and one agricultural institutional fund; personal equity $600k as part of $2.2m total equity raise
notes: Independent sponsor structure; guest targeted 1-2x EBITDA businesses above $1m; raised slightly over $2.2m in equity, turned some investors away to preserve control; seller note was not originally planned but became necessary to attract investors; working capital gap discovered in due diligence required additional negotiation (accounts receivable left behind); closed same day Elon Musk closed Twitter acquisition (October 2022)

Why this business

The business fit Eric's two prior lives — heavy civil construction and farming — as Rocky Mountain Reclamation is a contractor performing agronomic revegetation work. He was attracted by the long-tenured employee base (several with 10-20+ years), the key-man risk he was willing to absorb because of his operating confidence, the growing demand tailwinds (copper mining, renewable energy, national parks funding), niche positioning in a fragmented market, and alignment with his family values of building long-term community. The Wyoming location also fit criteria of no state income tax and a conservatively run state.

What's working

Long-tenured employee base (8 of 15-18 employees with 9+ years tenure) provides deep technical expertise and client trust that survived the ownership transition
Strong repeat customer relationships — key clients now specifically request Rocky Mountain Reclamation by name to general contractors, bypassing standard subcontractor competition
Business buyer fit: Eric's heavy civil construction background (pricing, equipment costs, contract structures, plan reading) translates directly and would be very hard to replicate without industry experience
Tailwind industries: copper mining demand surging, wind/solar farm buildout accelerating, DOT infrastructure funding, national parks restoration funding all driving demand for revegetation services
Niche positioning across 7 Mountain West states with willingness to mobilize to remote locations where competitors won't go; about 20-25% of revenue is recurring from long-term mining clients
Independent sponsor structure allowed Eric to retain majority control while raising outside equity, and the agricultural institutional fund investor validated the deal
Previous owner remained available as a technical resource and made personal introductions to long-term clients

What's hard

Revenue insecurity complex: 80% of revenue is bid, awarded, and completed within the same calendar year, with no long-term backlog — a massive mental shift from managing a 5-year $500m fixed contract
Cash flow management is intense: seasonal business means cash goes out during slow periods with no corporate backstop, and large projects can appear 12 days before mobilization
Equity raise was long and painful: search-fund investors rejected the business (too project-based, not enough recurring revenue, wanted preferred returns he wouldn't give), required finding family/friends/individual investors and eventually one agricultural fund
Leading employees who know more than you technically is harder than leading teams where you were the acknowledged expert — early daily check-in calls were perceived as micromanagement by autonomous field crews
Seller note was not in original deal structure and had to be renegotiated months in, after difficulty raising equity revealed investor requirement
Working capital was significantly underestimated by seller — discovered in due diligence to be roughly 2.5x what was originally stated, requiring additional negotiation
Relocation from DC Metro to Laramie, WY (pop. 32,000) was harder than expected for a family accustomed to moving — smaller social and church community, kids had difficulty making connections initially
Blue-collar labor market extremely tight: Wyoming at historical record low unemployment (~3%), ~61 applicants per 100 vacancies statewide, even worse in trades
Post-closing anxiety was significant and unexpected for someone who had been a high-level executive — first time facing loneliness at the top without capable peers and managers around him

Notable quotes

I have Revenue insecurity complex but it very much fits how I feel.

I'm taking on a lot of risk already and I have to put a personal guarantee on it, but then you're saying well I can't control the company necessarily. That's just where I saw that there was some misalignment, I thought, in my eyes on what investors' expectations were.

One dude just had the frank conversation, he's like don't call me, I'll call you. And I'm like, all right, I understand who you are, just understand when I do call, I'm not necessarily calling to tell you how to do your job, I'm just wanting to see how things are going.

In small towns, relationships are slower to make but they're deeper once they're made.