Alternative Exit
Alternative Exit is a dedicated to educating small business owners about the possibilities, benefits, and challenges of transitioning to an employee ownership model.
There are over 200m SMEs with an owner who will be retiring in the next 10 years, many of which will never find a buyer for their business, forcing them to close their doors.
There is an alternative. This show will explore various the different forms of employee ownership and best practices for successful transitions.
Each episode features interviews with experts in employee ownership, business owners who have made the transition, and consultants who facilitate these changes.
Alternative Exit
Alternative Exit #40 |The Data Behind Employee Owned Success with Rutgers' Adria Scharf
What drives a founder to sell their company to employees instead of outside investors? In this episode, I sit down with Dr. Adria Scharf, Project Director of the Curriculum Library for Employee Ownership (CLEO) at Rutgers University, to explore her groundbreaking research on what motivates business owners to choose employee ownership as their exit path. Adria shares insights from her ongoing study of ESOP sellers, unpacks the emotional and economic logic behind these decisions, and reflects on why ownership transitions are never just financial—they’re deeply human.
We dive into the emerging evidence shaping the future of employee ownership in the U.S., from macroeconomic trends to personal stories of founders who prioritise legacy over liquidation. Adria discusses why awareness and education remain the biggest barriers to broader adoption, and how a high-trust culture can make or break a successful transition. Packed with data, heart, and hope, this episode offers a rare window into the psychology of selling—and the possibility of exits that build both wealth and community.
Timestamps:
00:00 Introduction and Guest Overview
01:13 Exploring the Rutgers Institute’s Research Legacy
04:17 The Rising Awareness of Employee Ownership in the U.S.
08:20 What Motivates Founders to Choose Employee Ownership
11:55 The “Benevolence” Factor and Cultural Transitions
15:17 How Awareness and Advisor Education Affect Adoption
17:33 The Synergy Between High-Trust Culture and Employee Ownership
23:28 The True Cost—and Payoff—of Investing in Culture
28:34 ESOPs and the Wealth-Building Impact for Workers
32:20 Barriers to Scaling Employee Ownership
34:12 Fast Round: Leaders, Resources, and Final Words of Advice
Key Takeaways:
- Why wealth inequality and wage stagnation are driving renewed interest in employee ownership
- The mixed motivations of sellers—balancing liquidity, values, and workforce legacy
- How some owners find ESOPs a financially rational exit, not just a benevolent one
- The hidden effort required to build high-trust, high-performance cultures post-transition
- Why awareness and advisor education are the biggest barriers to EO adoption
- The proven wealth impact of ESOPs: average $165,000 per employee in retirement value
- Why ESOP regulation makes it a uniquely inclusive and equitable ownership model
- Adria’s call for simpler, off-the-shelf EO models to reach smaller businesses
About Dr. Adria Scharf:
Dr. Adria Scharf is the Project Director of the Curriculum Library for Employee Ownership (CLEO) at Rutgers University, the world’s largest university-based institute dedicated to advancing research and education on shared capitalism. Her work explores how employee ownership influences job quality, economic security, and business succession. A respected researcher and advocate, Adria has co-authored multiple reports and is shaping the academic foundation for the next generation of equitable business models.
Connect with Dr. Adria Scharf:
Website: https://cleo.rutgers.edu
LinkedIn: https://www.linkedin.com/in/adria-scharf-621b442/
Connect with Andy Farquharson:
LinkedIn - https://linkedin.com/in/andyfarquharson/
Instagram - https://instagram.com/andyfarq
Website - https://abettermonday.me/