Founders can get much richer by selling to employees

This is how we create a wave of employee ownership.

In 2019, Julian Richer sold 60 percent of his company for £9.2 million and didn’t have to pay taxes on any of it. 

The founder of Richer Sounds sold those shares to his employees—or more specifically, to an Employee Ownership Trust (or EOT) that holds those shares on behalf of employees. In the UK, founders can sell to an EOT without paying any taxes on earnings from the sale. There’s no cap, making this more lucrative than other exit options.

Richer became richer, but so did his workers. He retained 40 percent ownership of the company even as he slowly stepped away from day-to-day operations, watching those shares flourish under employee ownership. The company makes £10 million in annual profits and distributes 10 percent among employees.