“Making employee ownership the obvious choice for millions of businesses”
An interview with Zolidar founder Ashish Agrawal
Welcome back to The Stakehold. This week we interviewed the founder of Zolidar, an employee ownership-focused tech startup. Enjoy, recommend someone for a future interview, and forward this to a friend!
Mark: Jumping right in: Zolidar’s aim is to become the “easy button” for employee ownership. Can you share a bit about the different products and parts of Zolidar (The Grid, Map, Day Zero Guide, etc.), how they fit together, and what you hope to build from them?
Ashish: Today, ~300 employee-owned businesses are formed annually; I think that could become tens of thousands. With this vision in mind, we’re solving the complete journey of employee ownership across three phases: Prepare, Transition, and Operate. We started by launching products in the Prepare phase, because this is where most businesses get stuck. That includes (1) the Day Zero Guide, a free benchmarking of exit options; (2) our Aha Planner with instant financial feasibility analysis, business valuation, debt capacity, what-if simulations, and apples-to-apples comparison of different deal structures; and (3) Zolid AI, a thought partner for questions and next steps for all things EO. The Grid is a fourth product that ties everything together. It’s a professional community platform with directories of experts and organizations, a knowledge wiki, forum, and market map of employee-owned companies.
Mark: If I’m a business owner, where should I start, depending on what problem I’m trying to solve?
Ashish: It depends on your stage and what’s driving your interest in employee ownership. If you’re just exploring, start with the (free) Day Zero Guide. If you’re an advisor or owner interested in quantitative aspects of exit planning, our Aha Planner will show you what’s possible. If you need ongoing guidance, use Zolid AI as your companion throughout the process. And anyone can join The Grid community to find advisors, other business owners, and practitioners who can share experiences and provide referrals. Collaboration is key to any employee ownership transition. So all our tools support Google Docs-style collaboration features for owners, advisors, and even other stakeholders or experts they can pull-in as needed.
Mark: Where in this process is Zolidar making money (or planning to make it)?
Ashish: Our approach is fundamentally a bet on scale and long lifetime value from serving EO-centric businesses. Right now, we have an Advisor Tier ($3000/year) and a Business Owners Tier ($250-$1000/year), prices that reflect our conviction in the potential for large scale and our belief in making money by growing EO. As we grow, too, we plan to add SaaS subscriptions, transaction take-rates, and marketplace revenue.
Mark: Your recent article argues that the obstacle to scaling employee ownership is the absence of “a clear, confidence-building journey from awareness to action.” Many other advocates have tackled this question before; today, Expanding ESOPs thinks the answer is to expand employee ownership of publicly traded companies; Lafayette Square Institute thinks it is expanding investment funds. How does your theory fit in with, or depart from, theirs?
Ashish: First, I argue there hasn’t been enough effort invested in converting awareness into action. Business owners often get excited about employee ownership but encounter a wall of complexity. We are investing resources in converting the awareness that’s already being created.
Second, I’m not convinced financing is the biggest blocker. 5.9 million of our 6 million businesses have fewer than 100 employees, so a focus on finance moves us upmarket while ignoring seller-financing solutions that could work for the vast majority of at-risk businesses. In fact, in the UK 90%+ of employee ownership transitions are seller-financed.
Mark: In what part of the economy do you see the most potential for growth in employee ownership?
Ashish: Companies with 3-150 employees and $300k-$10m enterprise value. These represent the largest count of businesses and are key to the overall resilience of the economy. They’re at the highest risk of closure and could find a seller-financing path as an attractive solution. Traditional M&A overlooks them. We’re building software driven pathways to employee-ownership for this segment first, before moving upmarket as we demonstrate success.
Mark: A follow-up question about the question of scale: My estimate is that 15-20% of the private sector US workers are employee owners in some form. Another 10-15% are business owners or self-employed. Together that’s 25-35% of the private sector workforce! Is this a problem of framing, rather than scale?
Ashish: The phrase “in some form” matters there. I had restricted stock units at a previous job and viewed them as just another form of compensation. That doesn’t have to be. If employee recipients of equity compensation at Google had held their shares, for example, 10% of Google could have been owned by its employees. This would give employees greater influence over the company and inspire long-term thinking among employees. So yes, changing the narrative around equity compensation and helping current employee-owners recognize the value of their ownership is important, but I wouldn’t call this the primary issue. For many sectors of the economy, the bigger problem is that there are no pathways to employee ownership at all. When businesses lack these pathways, you get a zero-sum dynamic between current owners and non-owners.
Mark: You mention in your recent post that Zolidar wants to raise impact investing to spin out The Grid into a platform cooperative. What parts of Zolidar’s work will be housed in this new organization, what will stay within the core business, and how will that investment work?
Ashish: This is one of our most exciting initiatives. We’d like the community-curated data layer to be part of the stakeholder-owned portion, while the application layer that utilizes this data remains part of the core Zolidar business. The Grid could own, share revenue with, or license its content to Zolidar. And in turn, community members could earn ownership of the Grid by contributing or curating content, or engaging in other ways we’re still working out. We’re engaging with funders and partners to develop a legal framework for this, build out the technical infrastructure, and hire a team.
Mark: Zolidar seeks venture-scale returns. How do you think about reconciling returns to investors with the goal of putting more profits in the hands of employee-owners and user-owners?
Ashish: Taking a few steps back, we first tried but failed to get a USDA/NSF SBIR grant due to reviewers’ unfamiliarity with employee ownership. And our engagement with impact funds made us realize that their investment approach is more suited to supporting later stage ventures. It was angels and venture risk-level investors who had the appetite to invest in our vision for scaling employee ownership. Our team—founders included—has made real tradeoffs to pursue this vision. So we want to drive risk‑adjusted returns to our supporters. If we get it right, our VCs get their returns, community members get ownership in The Grid, our team generates wealth through restricted stock unit awards, and customers benefit from our products and services. Either we will succeed in enabling employee ownership for tens of thousands of businesses each year--thereby generating enough returns for sharing with all stakeholders--or we will fail, in which case there are no returns to share with anyone.
Mark: Several of Zolidar’s are AI tools, or have an AI component. How central is AI to your thesis? Is it a critical differentiator or a useful tool?
Ashish: Owners face a wall of legal, financial, and operational complexity that often stops them before they even start. The most common model is for advisors to front-load free advice and make up for it through high back-loaded costs, turning employee ownership into a high-margin and low-volume business that runs on tight referral networks. This keeps employee ownership out of reach for the businesses that need it most. Our use of AI unlocks a different business model, one that will increase the throughput of experts for helping businesses adopt employee ownership. This is critical to expanding the total market size so that advisors can help many more businesses adopt employee ownership, even those that would never consider it otherwise.
Mark: What will success look like for Zolidar in 2, 5, 10 years?
Ashish: Our north star is to make employee ownership the obvious choice for millions of businesses. In two years, we want to ensure every business considers employee ownership while evaluating their exit paths; offer a mechanism for direct employee ownership at businesses with 3 to 10 employees; enable any business to adopt software-enabled ownership culture building practices; and make the stakeholder-owned Grid critical infrastructure for employee ownership.
In five years, we will build: a workflow for transitioning to employee ownership; a mechanism for administration and governance aspects of employee ownership; and innovative employee ownership financing models to reduce the cost of capital. We also plan to expand to Canada, the UK, and Australia.
In ten years, Zolidar will become a critical infrastructure for driving and measuring employee ownership outcomes, with a thriving ecosystem of employee ownership apps and services built on top of the Zolidar platform; employee ownership will be a mainstream option for startup firms, not just an exit solution; 500,000+ businesses will use our platform annually; and our success will drive policy changes that further accelerate employee ownership adoption.
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