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#323: How ESOPs Work: The Transaction with Dave Diehl and Steve Storkan
Ep.#9 [THEME FIVE]
Today we’re kicking off a new four-part miniseries on ESOPs to support Employee Ownership Month.
Why are we spending four episodes diving into ESOPs?
After over 400 Intentional Growth™ training sessions with entrepreneurs, ESOPs have repeatedly been a hot topic people are hungry for more in-depth details about. We end up answering the same questions over and over (which we love!), so we wanted to capture the answers to the most frequently asked questions around ESOPs–with the right experts–in a fun miniseries that can act as an ESOP 101 and 201 for all the people who want to know more.
In this ESOP miniseries, Ryan has a co-host, Steve Storkan, the executive director of The Employee Ownership Exchange Network (EOX). EOX is a national organization that works to expand employee ownership across the U.S. by creating and supporting a network of non-profit state centers for employee ownership.
Today Ryan and Steve interview Dave Diehl, the CEO of Prairie Capital Advisors, about the ins and outs of the transaction and what it takes to turn into an ESOP.
This episode lays the groundwork for the next three episodes. Dave covers how ESOPs are valued, the process of selling to an ESOP, the unique tax breaks and how they work, the deal structure, when and how the seller (owner) gets their money, the role of the trustee, and how employees can begin to earn equity in the company they work for.
Our goal in this episode is to give you the foundation–and context–you need to level up your understanding on how ESOPs work, what it’s like to run a company once it is an ESOP, and introduce the different topics we’ll be diving into in the next few weeks.
Enjoy!
// WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast
What You Will Learn
The typical criteria needed to make sense for a business to become an ESOP.
What the process looks like–and which advisors are needed–to sell your company to an ESOP.
Why the seller gives the first offer in the negotiation process (usually this is the opposite when selling to a third party).
Typical ways an ESOP sale is structured (cash up front, seller’s note, warrants, etc.)
Why the crown jewel to an ESOP is to also be an S-Corp.
Why the company doesn’t pay federal or state income taxes when it turns into an ESOP.
The similarities of an ESOP to a 401(k).
The role of a trustee in the transaction and how to spot a good or bad one.
Why you get to interview and pick the trustee.
The characteristics and attributes of a strong ESOP.
How a business owner should start with an ESOP.
The business owners get to interview their buyer (the trustee).
View all episodes
By Arkona - Intentional GrowthEp.#9 [THEME FIVE]
Today we’re kicking off a new four-part miniseries on ESOPs to support Employee Ownership Month.
Why are we spending four episodes diving into ESOPs?
After over 400 Intentional Growth™ training sessions with entrepreneurs, ESOPs have repeatedly been a hot topic people are hungry for more in-depth details about. We end up answering the same questions over and over (which we love!), so we wanted to capture the answers to the most frequently asked questions around ESOPs–with the right experts–in a fun miniseries that can act as an ESOP 101 and 201 for all the people who want to know more.
In this ESOP miniseries, Ryan has a co-host, Steve Storkan, the executive director of The Employee Ownership Exchange Network (EOX). EOX is a national organization that works to expand employee ownership across the U.S. by creating and supporting a network of non-profit state centers for employee ownership.
Today Ryan and Steve interview Dave Diehl, the CEO of Prairie Capital Advisors, about the ins and outs of the transaction and what it takes to turn into an ESOP.
This episode lays the groundwork for the next three episodes. Dave covers how ESOPs are valued, the process of selling to an ESOP, the unique tax breaks and how they work, the deal structure, when and how the seller (owner) gets their money, the role of the trustee, and how employees can begin to earn equity in the company they work for.
Our goal in this episode is to give you the foundation–and context–you need to level up your understanding on how ESOPs work, what it’s like to run a company once it is an ESOP, and introduce the different topics we’ll be diving into in the next few weeks.
Enjoy!
// WATCH THE INTERVIEW ON YOUTUBE: Intentional Growth™ Podcast
What You Will Learn
The typical criteria needed to make sense for a business to become an ESOP.
What the process looks like–and which advisors are needed–to sell your company to an ESOP.
Why the seller gives the first offer in the negotiation process (usually this is the opposite when selling to a third party).
Typical ways an ESOP sale is structured (cash up front, seller’s note, warrants, etc.)
Why the crown jewel to an ESOP is to also be an S-Corp.
Why the company doesn’t pay federal or state income taxes when it turns into an ESOP.
The similarities of an ESOP to a 401(k).
The role of a trustee in the transaction and how to spot a good or bad one.
Why you get to interview and pick the trustee.
The characteristics and attributes of a strong ESOP.
How a business owner should start with an ESOP.
The business owners get to interview their buyer (the trustee).