The Collapse of Renovo Home Partners: Lessons on Private Equity and Remodeling Culture

Over the past week, the collapse of Renovo Home Partners has become the topic everyone in our industry is discussing. Remodelers are asking the same question: how could a company with so much money, talent, and promise unravel so quickly? I’ve spent a lot of time thinking about this—not as an outsider, but as someone who has worked with and advised many of the businesses Renovo acquired. What I see is not a failure of intelligence or effort. It’s the collision of two worlds that were never built to play the same game.

Businesses built through evolution, not design

Remodeling companies don’t begin as corporate strategies. They’re born out of necessity and passion—someone who loves to build, someone who needs to feed a family, someone who sees an opportunity and learns on the fly. That’s how most of the great regional firms got their start. The founder was a craftsman who picked up jobs where he could, hired a helper, then an installer, then a salesperson. Over the years, sometimes decades, the business evolved. But it was never designed the way a law firm or accounting practice might be.

That evolutionary DNA is both the strength and the challenge of remodeling. It creates deeply personal cultures that value relationships, intuition, and pride of craft. Those qualities make these companies successful—but they also make them very difficult to standardize or consolidate. When private equity entered the space, that’s what they were buying: not a system, but an organism.

Why private equity eyed remodeling

Private equity’s interest in home improvement didn’t appear out of nowhere. Around 2019 and 2020, as the pandemic reshaped the economy, remodelers saw demand explode. Some were growing 30, 40, even 50 percent a year. Lead flow was high, margins were strong, and consumers were spending heavily on their homes. At the same time, money was cheap. Interest rates were near zero, and investors were looking for places to put capital to work. Remodeling looked like a rocket ship.

When private equity firms saw regional companies with consistent profitability and growth, they began making offers that were almost impossible to refuse. Businesses that once would have sold for three to five times EBITDA now commanded eight, ten, or even twelve times. For owners who had spent decades building their companies, it was a once-in-a-lifetime opportunity to cash out. In Renovo’s case, the company combined multiple well-known regional remodelers under a single umbrella, promising to create a billion-dollar national platform.

The leveraged buyout debt trap

Private equity acquisitions are typically financed with borrowed money. The buyer leverages the purchase—meaning the acquired business now carries the debt that was used to buy it. In other words, the company is paying for the privilege of being bought. That structure only works if revenue keeps climbing fast enough to service the debt. As long as the market was growing 30 or 40 percent a year, it looked fine on paper. But once demand flattened, the business model couldn’t breathe.

By 2023 and 2024, growth had normalized. The companies that once looked unstoppable suddenly couldn’t cover their debt obligations. Instead of generating free cash, they were gasping to stay ahead of interest payments.

Organic businesses have unique cultures

The economics were only part of the problem. The deeper issue was cultural. Each company under the Renovo umbrella had its own evolution—its own history, leadership style, and customer philosophy. One was born out of an old-school craftsman’s shop; another out of a high-volume retail model. They were all successful on their own terms, but they didn’t speak the same language.

Worse still, the remodeling rhythm differs from that of private equity investors. When Renovo brought them together, the message was consistent: 

“We bought you because you’re excellent. We don’t want to change you. We just want to give you more resources.” 

That sounded good at the town hall meetings, but it proved impossible in practice. Private equity operates on a quarterly clock. Remodeling operates on a generational one.

Within a few quarters, the new owners expected performance reports that matched the growth trajectories of the pandemic years. When those numbers didn’t appear, pressure mounted. Leadership meetings became performance reviews. By the third or fourth quarter, founder-CEOs who had once run independent companies were being told to cut 10 percent of their overhead or lose their jobs. Many were eventually replaced. The result was a patchwork organization led by people who no longer shared the same vision, culture, or sense of ownership of the individual companies.

The rules of engagement

I think of this as a clash of “rules of engagement.” Using a football analogy, private equity plays a one-quarter game. Remodeling companies play a four-quarter game. If you build a team for one quarter, you recruit speed. If you build it for four, you recruit durability. The talent, the mindset, and the playbook are completely different.

Remodeling requires patience—long onboarding cycles, deep customer trust, years of apprenticeship, and skill-building. Private equity can’t operate on that timeline. When the first two quarters underperform, they’re already redrawing the org chart. That mismatch creates chaos. In some cases, leaders were asked to oversee multiple brands at once—companies with entirely different product categories, cultures, and geographies. The result was predictable: confusion, morale problems, and erosion of local identity.