"We Think We've Built Something Worth Protecting"
Reporting out from last week's Stewards Circle, organized by Common Trust
The upshot: Last week in Frisco, TX, Common Trust, an investor in purpose trusts, and Text-Em-All, a trust-owned software company, hosted the first-ever gathering of owners of purpose trusts in the United States.
Some 50-60 people gathered to swap stories and advice, including leaders from Equity Atlas, ACP International, Clegg Auto, Optimax, Organically Grown, CodeWeavers, ShopBot, RDA, and Ocaquatics (for a full list of trusts in the US, see our database).
Key takeaways: Rightly, the day focused on the stories of owners and workers, with companies getting to share their story from the stage, in interview, in Q&A sessions, and at roundtables.
Topics at the tables included establishing and ownership culture; organizing financing for purpose trust transitions; managing the company after the transaction; handling leadership transitions; and good practices in profit-sharing.
Derek Razo from Common Trust summed it up well: everyone in the room had come in thinking they were winging it, only to discover that everyone else was, too—the result being a stock of hard-won wisdom shared back and forth in a short few hours.
Some of the most memorable moments were hearing owners talk about their motivations and logic in selling their company to a trust.
“How much money did I really need?” was a common question from owners considering how to eventually leave their companies.
One owner had seen friends sell companies to private equity firms, only to end up with “fat wallets and broken hearts.”
Said another: “Making all that money came at too high of a price.”
These business owners were not liberal squishes. Each of these owners had spent years, if not decades, building up their companies. And as one owner put it, “we think we’ve built something worth protecting.”
The bigger picture: Common Trusts’ event was the first of its kind, and also one of a string of recent gatherings on shared ownership.
The Purpose Foundation’s October Day of Steward Ownership, the Pre-Distribution Initiative’s November Convening, the ongoing EOT Peer Gatherings by National Center for Employee Ownership (NCEO), EO+WD’s breakfast at the Neighborhood Economics conference, Transform Finance’s conferences and webinars and our April event on purpose trust ownership after the Employee Ownership Ideas Forum—together these reflect serious interest among philanthropists and policymakers in shared ownership.
This builds on decades of work by the Rutgers Institute and others to support and expand employee ownership by way of employee stock ownership plans (ESOPs) and worker cooperatives.
What’s next: More! And quickly.
Expect to see more purpose trust content at NCEO and Rutgers Institute events, and at impact investing events like SOCAP.
I imagine Common Trust will host more events like the Stewards Circle. It was clear owners wanted more content like that and time with each other, and were interested in supporting this activity with their time and resources.
Look for the increased inclusion of employee ownership trusts in outreach and policy advocacy efforts by state level employee ownership centers, including at TXCEO.
As for EO+WD, keep an eye out this week for a policy brief on purpose trusts in conjunction with Common Trust; and a Harvard Social Innovation Review article in partnership with Purpose Owned.
In the long term, this is the kind of work that a university-based academic center might take on, given a few more resources than are available to our humble EO+WD research cluster.
Great coverage on the event!