Alternative Exit Overview

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Episode Management

071024 | Derek Razo

Welcome to the Alternative Exit

"Today, we’re thrilled to have Derek Razo with us, the co-founder and managing partner of Common Trust, a company that’s redefining how businesses transition to employee ownership.

His work has been instrumental in making employee ownership a viable and impactful succession solution, innovting with new ownership models and structures

and we’re excited to hear more about his journey and the innovative approaches he’s championing at Common Trust."

Derek, welcome to Alternative Exit

Interview Questions:

You’ve been involved in employee ownership and alternative ownership models for quite some time. What initially drew you to this space, and how did your early experiences shape your vision for Common Trust?

(Encourages Derek to share his journey into employee ownership, including his previous roles at Purpose Foundation and Schmidt Futures.)

Spent a career helping companies work towards an exit.

Purpose foundation

Common Trust focuses on Employee Ownership Trusts (EOTs) as a key transition tool. Can you explain what an EOT is and why it’s particularly beneficial for businesses looking to preserve their mission

3-5m 80% will fail to sell, 75% will regret the sale

Number of transactions fall short only 4-6% are going to the existing exits. They are looking for a different investment thesis

The employees are the group of buyers

(Provides an opportunity for Derek to discuss the unique benefits of EOTs and their alignment with mission-driven businesses.)

Structured plan

Private trust, non-charitable, reduces everyones liability.

Simple

Trustee board - founder and the board

Long term ownership and profit share

how does it compare to the UK version

One of your key success stories is Clegg Auto, which saw record profits and employee satisfaction after transitioning to employee ownership. Could you share more about that case and what made it a success?

(Encourages Derek to delve into a specific example, offering tangible outcomes and insights for the audience(

⁠

The Startup Scoup -⁠

⁠

).)

In the U.S., we’re seeing a growing interest in employee ownership, but it still faces challenges in scaling. What do you see as the biggest barriers to adoption, and how can we overcome them?

(Gives Derek the chance to address broader industry challenges and potential solutions.)

Drive performance benefits

Ownership culture

A voice

Clegg Auto - Board

Share of the benefit

Challenge for owners

Requires a mutual trust.

Conscious consolidation

Common Trust recently raised $2.6 million in funding to support more employee ownership transitions. What are your next steps for expanding the reach of EOTs, and what do you hope to achieve with this funding?

(Allows Derek to talk about the future of Common Trust and its growth plans(

⁠

The Startup Scoup -⁠

⁠

).)

Looking ahead, what do you envision for the future of employee ownership? Are there any emerging trends or models that particularly excite you?

(A forward-looking question that lets Derek share his vision for the next evolution of the employee ownership landscape.)e

Traits

History of profitability

Team

Clean books

Fast round

Fast round of questions. I ask you a 3 questions and you offer a quick response. Does that sound ok?

Who is the leader you most admire in EO? Louis Kelso

What is your favourite resource on employee ownership. Videos TExt a Mole.

What would you say to an business owner sitting on the fence re: employee ownership. Come talk to us.

Thank you.

Thank you so much for your time and sharing your thoughts with us today.

Where can people follow you if they would like to learn more?

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