These are business insights that weren't forthcoming before
As millions of American business owners near the end of their working lives, a quiet but consequential shift is underway: rather than selling to outside investors, a growing number are transferring ownership to the people who showed up every day and built something alongside them. From an Oregon shoemaker to a Philadelphia manufacturer whose roots stretch back to 1919, these founders are choosing legacy over liquidity — and discovering that when workers become owners, the business often becomes more alive than before. The movement is still small, but the forces gathering behind it — demographic pressure, bipartisan policy interest, and rising investment — suggest it may soon be far harder to ignore.
- Six million baby boomer business owners face retirement by 2035, and most have no clear succession plan — a slow-moving crisis economists have begun calling a 'silver tsunami.'
- The fear driving many toward employee ownership is visceral: that an outside buyer will dismantle what took decades to build, moving jobs overseas or shutting operations entirely.
- Investment in employee ownership transfers surged 78% in a single year, reaching $865 million in 2025, signaling that capital is beginning to take this model seriously.
- The path is not easy — owners must wait years for payment, carry real financial risk, and navigate structures most have never heard of, from Employee Ownership Trusts to ESOPs to worker cooperatives.
- Government and Congress are moving to lower the barriers, and researchers at institutions like Harvard Business School believe a surge in successful conversions is imminent.
Tricia Salcido spent decades turning Softstar Shoes into something she cared about — a small Oregon shoemaker with craft, community, and 30 people depending on it. When the time came to think about stepping back, she feared what a traditional sale might do: production moved overseas, costs slashed, the soul of the place hollowed out. In January, she chose a different path. She sold the company to her employees.
She is part of a growing movement. Roughly six million American business owners are approaching retirement, and most will sell to outside buyers — private equity, larger corporations, investors seeking returns. But a rising number are handing their life's work to the people who helped build it. Around 600 firms made that transfer last year alone, and investment funds supporting such deals jumped from $500 million to $865 million in a single year.
What surprised Salcido was the transformation that followed. Once her employees became owners, they started thinking like owners. Ideas she had never heard before began arriving in her inbox — business insights, she says, that simply weren't forthcoming before. Research supports the pattern: employee-owned companies tend to be more productive, lay off fewer workers, pay better wages, and last longer.
The scale of what is coming is difficult to overstate. McKinsey estimates six million baby boomer owners of small and mid-sized businesses will retire by 2035. Many have children who don't want to take over. William Stockwell, whose Philadelphia manufacturing firm dates to 1919, watched other family businesses get absorbed and altered beyond recognition. He decided his employees deserved a different outcome.
Employee ownership takes several forms. Salcido used an Employee Ownership Trust, where a trust holds the company on workers' behalf and pays her in installments from future profits — meaning she carries the risk if the business falters. Stockwell chose an Employee Stock Ownership Plan, or ESOP, where workers accumulate shares redeemable when they leave. A third option allows workers to form a cooperative and buy in directly. ESOPs are the most established structure, with nearly 6,600 companies and almost 11 million workers participating as of 2023.
The obstacles are real. The process is complex, payment takes years, and most business owners have never encountered these options. But the Department of Labour has launched an Employee Ownership Initiative, and Congress has shown bipartisan interest in simplifying the path. For those willing to plan early and trust the people beside them, something remarkable becomes possible: a business that endures not because it was sold to the highest bidder, but because the people who built it decided to keep building it together.
Tricia Salcido spent decades building Softstar Shoes into something she cared about deeply. The Oregon shoemaker, now 56, had created a business that mattered—one with craft, with roots, with 30 people depending on it. But at some point, every founder faces the same question: what happens next? In January, Salcido made her choice. She sold the company to the people who worked there.
She is not alone. Across America, roughly six million business owners are approaching retirement age, and they face a decision that will reshape the economy over the next decade. Most will sell to outside buyers—private equity firms, larger corporations, investors looking for a return. But a growing number are choosing something different: handing their life's work to their employees. The shift is accelerating. Last year, around 600 American firms transferred ownership to their workers. Investment funds supporting these deals jumped 78 percent, from $500 million in 2024 to $865 million in 2025. It is a quiet revolution, barely visible in the headlines, but it is happening.
For Salcido, the decision was personal. She worried that a traditional buyer would strip the business for parts—move production overseas, cut costs, hollow out what made Softstar distinctive. "It's something you put your life's work into," she says. "Most small business owners really care." By selling to her employees, she preserved something that mattered to her: the jobs, the craft, the place itself. What surprised her was what happened next. Once the employees owned the company, they started thinking like owners. Suggestions arrived in her inbox. Ideas she had never heard before. "I'm getting personal emails from employees saying, 'well, have you thought about this idea?'" she recalls. "These are business insights that weren't forthcoming before!"
The research backs up what Salcido is experiencing. Employee-owned companies tend to be more productive. They lay off fewer people. They pay higher wages. They survive longer. For workers, ownership means sharing in both the risks and the rewards. For owners like Salcido, it means something else: a way to step back without abandoning what they built. She stayed on as chief financial officer, watching her team take the wheel.
The scale of what is coming is staggering. McKinsey estimates that six million baby boomer owners of small and medium-sized American companies will retire between now and 2035. Some have called it a "silver tsunami." Ethan Rouen, an associate professor at Harvard Business School, says he talks to business owners about selling almost every week. Many have children who do not want to take over the family venture. The traditional path—sell to the highest bidder—often feels wrong to owners who care about their legacy. William Stockwell, who runs Stockwell Elastomerics in Philadelphia, a manufacturer his great-grandfather founded in 1919, watched other family businesses get swallowed by larger companies. "The new ownership might move the business, they might shut it down, or drastically change it in other ways, and the people remaining are stuck," he says. He decided his employees deserved better.
The mechanics of employee ownership come in different forms. Softstar used an Employee Ownership Trust, or EOT. A trust takes ownership of the company on behalf of the workers, so no individual employee has to scrape together the purchase price. The trust then pays Salcido the agreed sale price in installments, drawn from future profits. This means she carries the risk. If the business fails, she does not get paid. But she believes in her team. Stockwell chose a different path: an Employee Stock Ownership Plan, or ESOP. Workers receive shares they can cash in only when they leave. Stockwell gets his money over ten years. Both approaches require patience and faith. There is also a third option: workers can form a cooperative and buy shares themselves.
ESOPs are the most common structure in America. As of 2023, there were 6,609 companies operating under ESOP ownership, employing 10.9 million people and holding combined assets exceeding $2 trillion. The appeal extends beyond aging founders. Younger workers, frustrated by traditional corporate hierarchies, are drawn to the model. "The only way to truly create wealth in this country is through ownership of capital," Rouen says. "And this is a way to democratise that." But adoption faces real obstacles. The process is complex, far messier than a straightforward sale. Owners have to wait years for their money. The risk is real. And most business owners have never even heard of these options. "No one's heard of them," Salcido says.
There are signs the tide is turning. The Department of Labour has launched an Employee Ownership Initiative. Congress has shown bipartisan interest in simplifying the process. Rouen believes the next few years will see a surge in successful conversions. Paul Silvis, a 71-year-old in central Pennsylvania, is in the middle of selling his manufacturing business, SilkoTek Corporation, to his workers. "I'm getting ready to ride off into the sunset at some point," he says. But Stockwell offers a word of caution: start planning early. This is not something you begin the year you want to retire. It takes time, patience, and a willingness to trust the people you have worked alongside for years. For those willing to make that leap, though, something remarkable becomes possible: a business that survives not because it was sold to the highest bidder, but because the people who built it together decided to keep building it together.
Citas Notables
It's something you put your life's work into. Most small business owners really care.— Tricia Salcido, Softstar Shoes
The new ownership might move the business, they might shut it down, or drastically change it in other ways, and the people remaining are stuck.— William Stockwell, Stockwell Elastomerics
La Conversación del Hearth Otra perspectiva de la historia
Why does Salcido's experience matter? She's one person selling one shoe company.
Because she represents a choice that six million business owners will face in the next decade. And her choice—to hand the business to employees rather than sell it—is becoming more common. It signals something about what owners actually care about when they step back.
But why would an owner take on the risk of waiting for payment, of betting on their employees' success?
Because the alternative—selling to a private equity firm or a larger corporation—often means watching what you built get dismantled. Salcido saw that risk clearly. For her, the risk of waiting for payment was smaller than the risk of losing control of something she cared about.
The numbers show investment in these deals jumped 78 percent. Is that because more owners want this, or because the financing is finally available?
Probably both. The financing is new—those investment funds didn't exist at this scale five years ago. But the desire was always there. Owners like Stockwell and Salcido were looking for a way out that didn't feel like betrayal. Now there's infrastructure to make it possible.
What's the catch? Why isn't every retiring owner doing this?
Complexity, mostly. And fear. A traditional sale is clean—you get your money, you walk away. With an ESOP or EOT, you're betting on people. You're waiting years for payment. You're exposed if the business struggles. And almost nobody knows these options exist. Salcido said it herself: "No one's heard of them."
So government support could change the equation?
Yes. If the Department of Labour makes the process simpler, if Congress removes barriers, if more owners learn these options exist—then what's now a small, growing movement could become the norm. Rouen thinks we'll see a real surge in the next few years.
What does this mean for workers?
It means the chance to build wealth through ownership, not just wages. It means a say in how the business runs. The research shows employee-owned companies pay better, keep more jobs, and last longer. But it also means risk. You're not just an employee anymore. You're invested in the outcome.