US Employee Buyout Funds Jump 78% to $865 Million as 6 Million Owners Near Retirement
Updated
Updated · BBC.com · Jun 14
US Employee Buyout Funds Jump 78% to $865 Million as 6 Million Owners Near Retirement
2 articles · Updated · BBC.com · Jun 14
Summary
$865 million flowed into funds financing US employee buyouts in 2025, up 78% from $500 million in 2024, as as many as 600 firms a year are now being sold to workers.
6 million US small and midsize business owners are expected to retire by 2035, creating what McKinsey called a once-in-a-generation ownership transition and pushing founders to seek successors.
Softstar Shoes in Oregon and Stockwell Elastomerics in Philadelphia chose worker ownership to preserve jobs and keep operations local, even though sellers must accept installment payments and ongoing business risk.
ESOPs remain the dominant structure, with 6,609 US companies, 10.9 million employees and more than $2 trillion in assets in 2023, while EOTs and co-ops offer other paths.
Washington is starting to back the model through a Labor Department employee-ownership initiative and bipartisan congressional support to simplify conversions, which advocates say could accelerate adoption.
Is the 'silver tsunami' of employee buyouts a golden opportunity for workers or a risky transfer from retiring owners?
Can turning employees into owners truly save America's Main Streets, or is it a niche solution to a massive business crisis?
The $1.5 Billion Surge: How Demographics, Policy, and Performance Are Driving the Employee Buyout Fund Boom (2024-2025)
Overview
Employee buyout funds are rapidly increasing in 2024-2025, mainly because many baby boomer business owners are retiring and need succession plans. More than half of small-business owners in the US are now over 55, which is a big jump from previous years. This demographic shift is pushing owners to prefer selling their companies to employees instead of outsiders. The advantages of employee ownership, such as better outcomes for workers and businesses, along with supportive government policies, are making this transition even more attractive. Together, these factors are driving the current surge in employee buyout activity.