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All the Flavors of Employee Ownership
ImpactAlpha hosts a conversation with investors in multiple kinds of ownership
ImpactAlpha, the subscription-based digital media platform, redefines business journalism around social and environmental value. Their Agents of Impact” series highlights impact investing, sustainable financing, ESG, and entrepreneurship for a more equitable and sustainable world.
On Agents of Impact Call 54: “The Worker-Ownership Edge,” Mosaic Capital Partners’ Ian Mohler, World Education Services’ Smitha Das, Apis & Heritage’s Todd Leverette, Common Trust’s Zoe Schlag and Anna-Lisa Miller of Ownership Works joined the call. Here are some highlights:
Roodgally Senatus from ImpactAlpha sets up the conversation by stating that the path to inclusive wealth runs through ownership of assets, whether that is real estate, business, or otherwise.
Smitha Das of World Education Services (WES) says that WES focused its efforts on four investment themes: opportunity, wealth, power, and justice. Historically, individuals have been able to build wealth through asset ownership such as home ownership and business ownership. Das goes on to talk about their efforts to support workers and especially immigrant workers to advance intergenerational wealth building. She also mentions Project Equity as one of their portfolio companies, explaining that Project Equity makes investments and transactions across multiple employee ownership structures, including cooperatives, while also building the field of broad-based employee ownership.
Todd Leverette describes Apis & Heritage as an employee ownership private equity firm that focuses on finding high-quality competitive small to medium-sized businesses and converting them from closely held privately owned companies into 100% employee-owned companies. They also focus on racial wealth gaps and higher-quality jobs that will create better life outcomes for people. Todd emphasized the idea of employee ownership being great for workers but also great for companies, citing evidence from the National Center for Employee Ownership and ESOP Association.
Zoe Schlag introduces Common Trust, an employee ownership buyout platform that focuses on supporting businesses transition to a form of employee ownership. One of the most interesting things about employee ownership trusts (EOTs) is that they are very customizable. Schlag gives the example of a business owner who is thinking about exiting. With EOTs, they have the option to exit to employees, and can also code in key purposes or values or culture that they want to remain protected in their business.
Ian Mohler from Mosaic Capital Partners focuses on employee stock ownership plans (ESOPs), the most common form of employee ownership in the US. Mohler highlights the longevity of ESOPs, which have been around since the 1970s. There are about 6,000-7,000 ESOP companies today. But Ian poses a question: If ESOPs are such a great structure, or if there is such a demand for employee ownership, why haven’t the increased in number in last 20 years?
Anna-Lisa Miller discusses Ownership Works, a non-profit organization founded in 2021. She emphasizes their mission of increasing the adoption of broad based employee ownership across communities. She also explains two main strategies they’re employing to hit their set goal of creating at least $20 billion of wealth for workers by 2030. They pursue this goal through “movement building” to generate interest in employee ownership across sectors, and by offering guidance to investors and companies on implementing broad-based ownership programs.
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