Andrew Kurzrok·February 5, 2026

SBA Deal Structuring to Manage Risk in a Cyclical Industry | Andrew Kurzrok Interview

Andrew Kurzrok, a former national security research scientist turned Amphenol manufacturing GM, bought Hopewell Sheet Metal Manufacturing — a 45-year-old custom commercial ductwork fabricator in Hagerstown, Maryland — in September 2025 after a self-funded search focused on technical businesses within 1.5 hours of his DC home. The deal was structured with roughly 25% equity (funded by Amphenol stock options) against a midsize SBA 7(a) loan, deliberately over-equitized relative to the 10% SBA minimum to cushion against the cyclicality of the construction industry. Andrew's key thesis was the business's natural geographic moat — shipping hollow steel duct is cost-prohibitive beyond a regional radius — combined with its 44-year track record through multiple downturns, 17-year average employee tenure, and highly customized hand-fabrication work that resists automation. His diligence approach borrowed from intelligence-community analytical methods, stress-testing his thesis (compliant, stable, growable SDE) against independent data points rather than running a checkbox exercise. Four months post-close the transition is smooth, with growth focus now turning to identifying target customers and sharpening sales and marketing.

Deal facts

sde ebitda: mid-6-figure SDE (stated as search parameter)
financing structure: SBA loan (~75%) + ~25% equity injection (self-funded); line of credit also secured at close; working capital included in term loan
notes: Asset purchase, debt-free cash-free deal; described as a 'midsize SBA deal' well below the $5M SBA cap; equity injection funded from Amphenol stock options; closed September 2025; 21 employees

Why this business

Andrew wanted a technical business he could differentiate in through his background in technical sales and manufacturing operations, close enough to home (within 1.5-hour drive) to avoid the 200-days-a-year travel that came with his Amphenol GM role, and one with natural geographic moat. Hopewell Sheet Metal — a custom commercial ductwork fabricator — fit because galvanized steel duct is uneconomical to ship long distances, limiting competition to regional players, and because the hand-crafted custom fittings resist automation. He was also drawn to the 45-year track record surviving multiple downturns, the retirement-ready seller, and the cyclicality of construction being manageable given how he structured the deal.

What's working

Smooth ownership transition: crawl-walk-run approach preserved customer relationships and employee stability in first 90 days
Natural geographic moat: shipping hollow steel duct is cost-prohibitive beyond regional range, so out-of-region competitors are non-economic
High average employee tenure (17 years), providing deep institutional knowledge and customer relationships
25% equity injection (vs. 10% SBA minimum) reduces debt service burden and provides cyclicality cushion
Thesis-driven diligence using intelligence-community 'analysis of competing hypotheses' framework gave conviction on stability and SDE quality
Secured both a term loan (including permanent working capital) and a line of credit at close, providing liquidity backstop
Seller was a cooperative transition partner; holiday party celebrated sellers' retirement, cementing goodwill

What's hard

Construction is inherently cyclical; Hopewell carries more leverage today than at any point in its 44-year history
Cold outreach by email failed badly due to email deliverability issues (unusual TLD domain); physical mail also yielded no response — cold calling was the only outreach method that worked
Some vendors would not extend the same credit terms to the new LLC that they gave to the prior 1981 entity; cash-upfront or card required until relationships are established
Wire transfer for equity injection was blocked by the bank (attorney trust vs. real estate escrow); had to drive a cashier's check from DC to Philadelphia on closing day
Differentiation within local market is the biggest open question — loyal customers cut both ways, making it hard to win competitors' customers
Business is not contractually recurring; no classic search-fund-style recurring revenue, which required a different risk framework to get comfortable with

Notable quotes

Would you rather be 35 and have failed but you tried or would you rather be the SVP pushed out of your corporate career at 55? Which one's riskier?

I had no business running a business when I had never worked in one before.

The diesel fuel costs more than the duct. So you're just — I am never going to compete with somebody in Atlanta, Georgia. Georgia is not going to compete with me. It's just non-economic.

That question of tell me how the story ends — that's fundamentally a private equity question. If I'm going to give you my money as a limited partner, I need my money back. How am I going to get my money back? We just didn't see that as a useful analysis for running a family business.