When it comes to career prospects, the CEO of KangaRoof, Stacie Feller, knew security was at the top of her priority list. She desired a job that provided the best of both worlds: financial security and predictability. So, it is no surprise she found herself in corporate insurance for 20 years – quite the contrast to her husband Scott Feller’s entrepreneurial spirit.

But the tides changed when the couple married in 2012. She took a closer look at his roofing business and, what was at the time a one-man show, had the potential to turn into something more. Something bigger.

“Our goal was to grow the business so we could have more control over our lives,” said Feller.

She retired from her corporate job, became CEO of the company in 2017, and steadily grew it into the multimillion-dollar business it is today.

However, running a business is not a steady and predictable venture, especially in the construction industry.

It’s more of an ambitious ride through smooth and rough waters, and sometimes those rough patches can capsize a successful business. That’s why Flatbay Capital exists – to be that emergency raft in a time of need.

The Origin of KangaRoof

The Fellers obviously have a knack for solving problems – or at least those you can see. It all started in Iowa. Young Scott Feller, an Iowa State student at the time, utilized his skill with a hammer, donned a work belt, and roofed for most of his college career. He’d do it all himself – from selling the job to buying the shingles. It was the perfect side gig for someone majoring in construction engineering.

And he was good at it.

Having earned more than enough money during that first summer, he decided to hire his friends for the next two summers up until graduation, where then, any idea of roofing faded into oblivion.

Surprisingly, the founder of KangaRoof never intended to do this for the long term.

“He thought he was too good to be a roofer at that point.” Feller reflected upon her husband’s naive perspective. “He was an engineer.”

For the first half of Scott’s professional career, he worked for other construction companies until his entrepreneurial spirit pulled him to the Austin market where he went back into business as a general contractor.

Keeping to his one-man show mentality, most of his projects revolved around remodeling but that did not exempt roofing. In fact, what he found was that while remodeling he was still doing a whole lot of roofing.

It was not until 2009 when the economy slowed down and a hailstorm passed over central Texas, Scott had a change of heart.

He had gone to his parent’s house to repair their roof for insurance purposes when they handed him a list of 14 other friends who also needed roof repairs.

That is when he realized there was a place for him in the industry after all.

KangaRoof and Flatbay Capital

For over two decades, the family-operated business has upheld the values of passion, quality, family, and integrity, which has boosted it to be one of the top competitors in the region. But it hit an unexpected rough patch in 2022. That’s when Flatbay Capital stepped in.

It began In the spring of 2021. Austin added another hailstorm to its list of most damaging weather in the city’s history. The golf-ball-sized ice racked up tens of millions of dollars worth of damage.

For roofing companies, this was game time.

Customers flooded the books. To meet the demand, Feller expanded overhead. That year KangaRoof hit an exciting milestone – they increased gross revenue by 50 percent! The Kanga team wanted nothing but to bring that momentum into the next.

But no one was betting on a drought.

“What happened was all the work I would’ve done in 2022 got done the year before by other roofers,” Feller said. “So there was no weather, no storm, no work.”

The CEO faced two options: lay people off and risk not having the manpower when the season started or wait it out. She chose the latter. The last thing she wanted to do was lay off people because she did not wait.

Unfortunately, come July of 2022, the season they hoped for proved nonexistent. KangaRoof went from a 50 percent increase in revenue to a two-thirds reduction. Revenue dropped to a whopping 37 percent.

At this point, the company hemorrhaged money, and the few employees that had been let go were not enough to keep it afloat.

Its lack of profitability was echoed by the bank. There simply was not enough cash flow.

However, a solution appeared closer than Feller thought. In this instance, it came from Vince Calicchia – a SBA Business Development Officer / President with Community Business Finance – who knew of a private credit firm that could help. Feller then found herself face to face with Vivian Thompson, BDO and partner of Flatbay Capital.

But even then she hoped for another outcome.

“I kept delaying things because I was hoping the season would pick up,” said Feller. “Vivian was so patient with me.”

Eventually, she had to relent. Though asking for help is never easy, Feller respected how Flatbay handled themselves.

“When you get in a position that I was in, you feel like your back is against the wall. I always felt like the Flatbay team never treated me like that. They were very professional and compassionate.”

Both parties settled on a commercial real estate bridge loan that helped KangaRoof pay off existing debt and use the rest for cash out. With the additional working capital, the company could expand its operations and invest in equipment.

Looking toward the Future

By the second quarter of 2024, KangaRoof exited Flatbay Capital because of the profits generated from the combination of liquidation of non-core assets and income generated utilizing Flatbay’s debt facility.

Watching entrepreneurs turn their predicaments into successes fuels Flatbay’s purpose to bridge the funding gap for businesses that do not fit the traditional banking profile.

KangaRoof is a stunning example of this.

Feller said the company is on target for the year and is very profitable. She has a great team that she trusts wholeheartedly and looks forward to the future.

“From this experience, I learned a good lesson on hiring,” she said. “I know if heaven forbid, I ever need Flatbay again, I can trust them.”