Texas Statewide Three-Part Virtual Learning Series: The Shared Ownership Economy – Session One

What We Covered

This webinar explored employee ownership as a wealth-building, business-retention, and economic resilience strategy for Texas. The conversation examined why shared ownership belongs within an asset-building portfolio, the different ways businesses can transition to employee ownership, the barriers limiting wider adoption, and the opportunities for philanthropy and public policy to help build a stronger employee ownership ecosystem across the state.

Katie Sirakos of the Asset Funders Network opened by connecting employee ownership directly to AFN’s work on equitable wealth building and economic mobility. Business ownership has long been a pathway for families to build wealth, and shared ownership—through Employee Stock Ownership Plans (ESOPs), Employee Ownership Trusts (EOTs), and worker cooperatives—extends that opportunity to workers without requiring them to provide the capital to purchase the business. She highlighted three reasons Texas is at an important moment: 53% of Texas businesses have an owner age 55 or older, creating a significant wave of upcoming succession decisions; the state already has more than 300 employee-owned companies and growing infrastructure to support conversions; and the 2027 Texas Legislative Session presents opportunities to advance supportive policies. Employee ownership offers business owners another succession option beyond closing or selling to an outside buyer—one that can keep businesses, jobs, and wealth rooted in their communities.

Taylor Nichol of the Texas Center for Employee Ownership provided an Employee Ownership 101 and emphasized the scale of the opportunity in Texas. Small businesses make up 99% of businesses in the state and employ approximately 3 million people, representing $119 billion in payroll and nearly $600 billion in revenue. She walked through three primary ownership structures. ESOPs are federally regulated plans that allow employees to accumulate company shares as a retirement benefit without purchasing those shares themselves. Worker cooperatives center democratic governance and profit sharing, giving employees a direct role in business leadership and decision-making. Employee Ownership Trusts offer a flexible model in which a trust holds some or all of a company’s shares on behalf of employees, who typically benefit through ongoing profit sharing while they work for the company. Across the models, Taylor emphasized the potential for employee ownership to strengthen businesses, retain workers, preserve local jobs, and create meaningful opportunities for workers to build wealth.

Julien Rosenbloom of the Lafayette Square Institute focused on one of the largest barriers to expanding employee ownership: access to capital. Texas has more than 300 privately held employee-owned companies with approximately 80,000 active participants, and average ESOP plan assets exceed $300,000 per participant. Yet an employee ownership conversion can be structurally less competitive than selling to a traditional buyer because employees generally do not bring capital to the transaction. Banks may finance only a portion of the sale, leaving the business owner to accept a seller note that is repaid over several years rather than receiving the full proceeds at closing. Julien outlined a potential statewide framework that could pair stronger institutional capacity with financing tools such as a revolving loan fund and loan-loss reserve. He also pointed to existing federal resources—including the State Small Business Credit Initiative, Economic Development Administration funding, and U.S. Department of Labor programs—that could help Texas expand financing, technical assistance, education, and outreach.

The discussion reinforced that employee ownership reaches well beyond a traditional labor-policy frame. Panelists described it as a working-families, workforce, economic development, and business-retention strategy. Employee owners can benefit through higher wages, profit sharing, and long-term retirement wealth, while communities benefit when locally rooted businesses and jobs remain in place. The conversation also highlighted the importance of building an ownership culture inside businesses through financial and business literacy, open-book management, employee leadership, and technical assistance—not simply changing the legal ownership structure.

What The Panel Recommends Funding

Invest in field infrastructure. Many business owners and their advisors still do not know that employee ownership is a viable succession option. Philanthropy can support owner education, business outreach, lender engagement, technical assistance, and organizations that help companies understand and navigate the different ownership models. Building this pipeline should happen alongside efforts to expand financing so businesses that are interested in converting have a viable path forward.

Support policy and program design. Expanding employee ownership at scale will require supportive public policy and coordination across the existing ecosystem. Philanthropy can fund policy development, research and impact modeling, coalition building, technical expertise, and implementation support that help agencies and policymakers identify effective approaches ahead of the 2027 Texas Legislative Session.

Deploy catalytic capital. Philanthropy can also play a direct role in addressing the financing gap. Grants, program-related investments, matching funds, and other forms of catalytic capital could help capitalize or de-risk financing tools such as a revolving loan fund. Combined with public and private capital, these investments could make employee ownership conversions more competitive for business owners while preserving companies, jobs, and wealth in Texas communities.