Why do some selling business owners choose employee ownership over private equity and other conventional exits? This report shares lessons from leaders who sold their companies to their workers.
Why do some business owners choose to sell their companies to their employees? This report examines why business owners choose to transition ownership to employees, most often through an Employee Stock Ownership Plan (ESOP). Drawing on in-depth interviews, it presents business sellers’ motivations in their own words—what triggered their search for an exit or succession solution, how they evaluated employee ownership compared to more common exit pathways, and their reflections.
“When small manufacturing or speciality distribution companies get snapped up by private equity, you lose innovation and all of those special nuances of that business are gone.”
The ESOP preserved the company’s independence. –William Stockwell, fourth-generation owner
“I was looking for a way to acknowledge employee contributions with some form of equity.” –Paulo Rodriguez Heyman, who transferred 49% of the company to an ESOP, while holding on to a 51% stake himself.
Becoming an ESOP “cut out a huge portion of taxes. If we didn’t have to pay those on an annual basis, we could put the savings right
back into the business—to expand services, strengthen the team, and build for the future.” –Tracy Till, Co-Founder of Butler/Till
