Announcing the Vermont Capital Guide!

An inherent challenge for expanding employee ownership is access to capital. If a company wants to maintain its status as employee-owned, its avenues for taking investment are limited in key ways compared to “investor owned” firms.

Fortunately, in my more than a decade in the field, a number of developments have considerably improved the capital environment to make EO more accessible. For worker co-ops, the Cooperative Fund of the Northeast’s maximum loan size has grown five-fold, making the model a possibility for companies of a whole new scale. In the ESOP space, SBA loan guarantees are finally becoming accessible, and we’ve recently seen several local financial institutions close on their first deals. And more exciting developments are on the horizon, like the proposed Employee Equity Investment Act.

While this growth of institutional support is exciting, capital gaps that require creativity to bridge are still commonplace, particularly in transactions that transition companies to employee ownership. It’s often possible for individuals and communities to make up the difference, but navigating how to make that work without running afoul of securities laws can be an intimidating prospect for people raising investment money for the first time.

So, as a tool intended to make the process more accessible, we are pleased to announce the release of the Vermont Capital Guide!

Companies will find in the Guide an accessible yet comprehensive menu of options for taking on new investment, along with an overview of their associated limitations, regulations (both national and Vermont-specific), and advantages. While undoubtedly useful for any entrepreneur or business navigating fundraising in Vermont's financial regulatory environment, we planned and commissioned this resource so that it is of particular value in the context of employee ownership.

The Vermont Capital Guide was written in collaboration with the talented and dedicated lawyers at Merritt & Merritt, with partial funds secured for VEOC by Sen. Bernie Sanders via the Small Business Administration. We are eager to see the guide put to use in Vermont as we share this resource with the Vermont community of employee-owned businesses and employee groups interested in taking on ownership together.