Employee Ownership for Self Funded Search?
Has anyone explored adding any element of employee ownership to an acquired business upon purchasing it through a self funded search?
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by an investor
from University of Colorado at Boulder
in Durango, CO, USA
in Durango, CO, USA
1yr ago
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by a lender
1yr ago
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
We often see buyers offer some employees some ownership at close. It is something the lenders like to see as well if there are key employees you are trying to retain. I believe it is a good idea, although you are slightly diluting your ownership interest as you are paying for the business and then giving some of it up.
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by a searcher
1yr ago
from University of California, Berkeley in Oakland, CA, USA
from University of California, Berkeley in Oakland, CA, USA
In the case of an ESOP (or other broad-based employee ownership structure), If there is a fund that can come in with mezzanine capital alongside bank senior debt, the larger seller note issue can be addressed. There are many great funds in the employee ownership space (^redacted at Small Capital can share more about what they're up to) that are bridging the gaps of the challenges that Mike describes in creative ways. Would love to know if anyone in the self funded search space is interested in integrating employee ownership of some form (can be an ESOP but there are also other approaches that work with less regulatory overhead), as it can reap huge benefits to have a high engagement culture tied to actual ownership by the workforce.
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