1. Flexible for businesses of any size with W2 employees
Unlike ESOPs, coops can be designed for a business with any amount of employees because they’re less complex to set up and maintain, more affordable to transition and less costly to run.
2. Ownership culture supported by leadership and employees
Coops work best when selling owners and succession management want to see employees rewarded, retained and engaged in an ownership culture. That’s because in a coop, equity and governance are managed by the employee-owners. Any employee-owners who pay a small equity buy-in elect the Board of Directors, which, unlike many privately held companies, is made up mostly or entirely of employee-owners.
3. Succession leadership identified or in development
For a business to be ready for a worker coop transition, a selling owner has to have replacement leadership in place for when they stop having an operational role in the business. The good news is that the selling owner can flexibly design their exit plan with a worker cooperative transition, so they don’t have to exit immediately.
Read the rest at Project Equity
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