Employee-owned firms reduce the disconnect between workers and owners, but they still need significant investment to scale.
Investment opportunities in employee ownership are limited but emerging, says a new report from the Democracy Collaborative, authored by Mary Ann Beyster of the Foundation for Enterprise Development.
The report identifies six community development financial institutions, including Capital Impact Partners in Washington D.C and New York City-based The Working World, that focus on financing employee ownership. Two private equity funds that back mid-sized employee-owned firms are Mosaic Capital Partners in Charlotte, North Carolina and and Long Point Capital, with locations in Royal Oak, Michigan, and New York City.
Another investable option identified in the report: National Cooperative Bank, also in New York City. The bank has lent to worker-owned cooperatives and other employee-ownership models for decades.
Employees that own part of their own companies are less likely to be laid off and are 92% wealthier and make 33% more than their non-employee owner peers.
