Employee ownership models – and in particular, worker cooperatives and ESOPs – are a demonstrated way for workers to participate in the value they create, building economic assets along with their power and agency. Conversions to employee ownership can also provide a viable exit for retiring owners while keeping the legacy of the business in the community.
Yet we don’t see that many, and investors and business owners cite a variety of obstacles. What is needed to increase the number of conversions? An answer may lie in an instrument that makes capital available, on non-extractive terms, to ease the pain points for selling owners. We set forth such an option, based on a private-equity buyout combined with an ESOP structure and centering the needs of low-income workers and workers of color, in our forthcoming report: “Investing in Employee Ownership: A Fund-Level Model for Conversions.”
The report's authors, Andrea Armeni and Camille Kerr, will present the model and discuss its implications, especially around impact guardrails and ensuring that benefits accrue first and foremost to low income workers and workers of color. We will also hear from Scott Abrams of Open Society Foundations' Economic Justice Program on how this work fits within a broader context of fostering a just society.
