Diving Deeper Into TeamShares

Explaining a unique model in the employee ownership space

In Brief: Nebraska restaurant Vincenzo’s has transitioned to employee ownership under the TeamShares model. 

How It Works: TeamShares is a unique actor in the employee ownership field, focusing on converting small, locally owned businesses to employee ownership. They differ from other service providers, however, because they achieve these transitions through acquisition. TeamShares caters mainly to small business owners looking to retire and enjoy employee ownership as their legacy. TeamShares acquires the business and allows the current owners to retire. They appoint an in-network leader to run the company and initially grant 10% of ownership to employees. For employees who continue to stay with the business greater opportunities for ownership will be presented. TeamShares aims to have the businesses they acquire be 80% employee owned within twenty years. 

The Questions: While TeamShares is a compelling option for business owners who are looking to retire and leave their business to their employees, it may not be the best route for employers who are looking to retain control or ensure that other aspects of their businesses’ legacy are honored. The ease of the transition is incredibly high, however, unlike with EOTs or sales to a co-op of current employees, the former owner retains no control and there is no guarantee that their wishes and goals for the company will continue to be honored in perpetuity. Questions also remain about the specifics of TeamShares stock allocation to employees. What form does this stock come in, and what stipulations (if any?) does TeamShares place on the stock. These are all important questions that are needed to determine exactly how beneficial the TeamShares structure is to employees.

Go Deeper: Check out the original article here 

Image Credit: Photo by Annie Spratt on Unsplash