Todd Goldman is the managing director of a boutique M&A firm specializing in ESOP advisory. ESOPs, or Employee Stock Ownership Plans, incentivize owners to transition their companies through Congress’ 1042 legislation, enabling them to sell tax-free. This conversation covers the challenges and opportunities of private equity transactions and ESFs. Todd also dives into the goals of ESFs, including maintaining a sense of control, stakeholder value, legacy, and market liquidity for the business.

Key Highlights

[00:01 – 07:25] Opening Segment

• ESOP stands for Employee Stock Ownership Plan
• Louis Kelso pioneered the concept in the 1970s to incentivize business owners to transition in a different way

[07:26 – 14:45] ESF Deals for Market Liquidity, Legacy, and Life of Relevance

• Private equity is seen as significant on the front end but can be challenging to work with
• The goals for ESFs include legacy, a life of relevance, culture, stakeholder value, and getting market liquidity for the business

[14:46 – 20:48] Generational Differences in Employee Ownership

• Gen Z and Millennials view work relationships differently
• Employee ownership is attractive to younger generations
• Retention rates are higher in employee-owned companies

[20:49 – 27:04] Unlocking the Benefits of ESOPs

• ESOPs are an excellent outcome for people-based businesses and are an attractive option for owners who want to transition out of their business
• ESOPs involve raising third-party financing with a bank and setting up a legal entity

[27:05 – 33:51] The Nuances of Business Transition Planning

• Having the right influencers around the table is vital for closely held businesses
• Goals must be discussed to understand what the business owner wants to accomplish

[33:52 – 35:49] Closing Segment

Additional Links:

Website: www.lazearcapital.com 

Todd’s LinkedIn: https://www.linkedin.com/in/todd-goldman-81a968149/ 

Brian’s Linkedin: https://www.linkedin.com/in/brian-c-adams/