Guidelines for Equitable Employee Ownership Transitions: How Investors, Founders, and Employees Can Share in the Value Created by Broadly Held Enterprise Ownership - CLEO Skip to main content


With the impending wave of baby boomer retirements, millions of privately owned businesses could come to market in the coming decades, and the COVID-19 pandemic will only accelerate that process.  Meanwhile, interest in financing business owner exits that result in employee ownership is growing rapidly among impact-focused investors. This emerging investing trend is driven by a growing recognition that employee ownership is a proven, scalable, and sustainable strategy to address the problem of rampant inequality.

Impact capital could be the missing agent needed to ensure that a significant portion of these “silver tsunami” firms transition to employee ownership, creating the momentum needed for broader adoption of the model. But how?

These Guidelines for Equitable Employee Ownership Transitions are a collaborative work of practitioners and thought leaders in the fields of investment management, employee ownership, and socially responsible business who believe deeply in the promise of shared enterprise ownership to build a more just and inclusive economy.

Professionals who have spent decades working in this field know that structuring employee buyouts can be complicated and opaque for newcomers and also know that it is vital to avoid an influx of new transaction activity that leads to deals which inadvertently disadvantage employees or permit excess extraction of value by non-employee investors.

Arranged by deal stage and structured on a tiered system that positions each item as necessary, good-practice, or aspirational, these guidelines are offered to the many investors, asset managers, and employee ownership professionals who lead and will lead this important work in the future. They are intended to feel intuitive and flexible, and to communicate straightforward best practices that demystify this work and welcome new entrants and innovators, while at the same time proposing clear guardrails that ensure that future employee ownership transitions can create the best possible social and economic outcomes for employee-owners and their communities.