Journey to an ESOP & Beyond

What are the alternatives to an ESOP?  One is the EOT or employee ownership trust.  This presents some particular differences to the ESOP that might be part of the consideration early in your journey to an esop.  Chris Michael is the founder of EOT advisors and helps selling shareholders review this as an option to the ESOP.  Chris is a very knowledge professional with an academic background as well.

This episode comes from questions generated from our website at journeytoanesop.com - to help better understand what is the best way to announce the news to your employees about your new ESOP.  On this episode, we cover the deeper questions of matching up ESOP news and announcements with a particular culture and how important it is to have an impactful message as you build.  But having a strategy to message it frequently is going to be significant to enhance your culture into “ownership thinking.”

This episode we get the opportunity to interview Mike Keesee and Carl Brown selling shareholders of an Architect and Engineering firm out of Orlando FL.  Mike and Carl have been on a journey to an esop - find out lessons learned and how they have worked through the process.  The company happens to be both an EOS (traction) and Great Game of Business managed company.  This episode will provide some valuable insights for those considering the ESOP from multiple angles including: succession planning, exit planning, culture, long-term flexibility, employee engagement and other important aspects of an ESOP.

This episode is generated out of many recent conversations with different folks all over the country - it is intended to discuss an important topic that selling shareholders that are considering the ESOP as an option need to nail down early in the process - How do I get my money for the stock I just sold? Once they understand this - they can either continue on their journey to an ESOP or take another route towards a different solution.

The Secure 2.0 Act of 2022 makes some interesting developments in the world of  ESOPs.  John Burgess and I work through categorically how this new legislation will affect ESOPs now and into the future.  We touch on its changes for 1042, tax credits, ESOP education, and ESOP plan design.  Overall this legislation provides more reassurance that ESOPs have bipartisan support and are only becoming a stronger part of the US economy.

This episode deals with the need all businesses have to build talent in their company.  The topic comes at the beginning of the year as we start to think about building the business for a sustainable ESOP which really does improve the strength of the company from a valuation as well as the long-term value.  Just as important - the business has the benefit of a leadership team to support the transition of selling shareholders into key positions.  This podcast is just a good reminder to think about your efforts and processes related to recruiting key people.

This episode - Adrian Loud - ESOP Buy-Side valuator and I talk through the role of the process that a financial advisor to the ESOP trustee plays in the process of valuing the business specifically for the transaction as well as their role in other aspects of the transaction.  What is helpful is to better understand what they are thinking, how they go about their process as the sell-side estimates the value that will come from negotiations.  Adrian also shares some case study areas that you should be aware of as you continue your journey to an ESOP.

Does anyone understand what is going on in the Tenet movie…it moves forwards and backwards.  I think sometimes ESOP can be the same. This episode breaks down with clarity the conceptual factors of deciding to do an ESOP and real questions that others have asked to determine if an ESOP right for them.

This is the first episode of season 4 and as such we wanted to jump right into a valuable topic to help folks prepare for their ESOP regarding understanding how warrants are calculated as a potential benefit to the selling shareholders.  Will Rodriguez with Vision Point provides a solid overview of the methodology of estimating the number of synthetic shares of warrants issued at the time of the transaction.

In this episode we evaluate the issues that selling shareholders will likely run into when considering selling their business to either a private equity, venture capital, or strategic buyer.  This episode is inspired by questions that come up from selling shareholders on the alternatives to selling their business to an ESOP.  It is helpful to determine whether the ESOP is a good direction and can be confusing to evaluate this option of selling your business.