ESOP Advisory
Sell your business to your employees — on your terms.
An Employee Stock Ownership Plan (ESOP) can deliver fair market value to you, meaningful tax advantages, and a lasting legacy for the people who built your company. RBG Capital guides owners from feasibility to close.
- Receive fair market value as determined by an independent appraiser (not guaranteed; may differ from a third-party sale price) for your shares at close
- Defer capital gains tax under IRC §1042 when its requirements are met.
- Preserve your culture, brand, and the people who built the company
- Retain board control until you are paid in full
Est. 1986
Nearly four decades advising owners
$5M–$200M+
Transaction size range
IRC §1042
Capital-gains tax deferral for C-corp sellers
Owners only
We represent sellers, never buyers
Why an ESOP?
One transaction that takes care of you, your team, and your legacy.
For many owners, a sale to a strategic buyer or private equity firm is not the right answer. They care about what happens to their employees, want their culture to survive, and want to exit in a way that reflects the values they built the company around. An ESOP can address all of that — while delivering tax advantages often unavailable through a conventional sale.
An ESOP is not right for every owner: it pays fair market value rather than a strategic buyer's premium, adds financing/leverage, and creates an ongoing obligation to repurchase shares from departing employees.
Owner Liquidity
Receive fair market value as determined by an independent appraiser for your shares at close, with the ability to structure a phased exit or stay involved after the transaction.
Tax Advantages
C-corp sellers can defer capital gains tax under IRC §1042 when its requirements are met. For S-corps, the ESOP's ownership percentage is exempt from federal income tax.
Employee Ownership
Employees become beneficial owners through a qualified retirement plan, improving alignment and retention while honoring the legacy you built.
Business Continuity
The company stays independent. Leadership and culture are preserved, and customers and employees experience minimal disruption.
Is an ESOP right for you?
Strong ESOP candidates usually share a few traits.
If several of these describe your company, an ESOP may be worth a closer look. We assess feasibility early in our process — at no cost and with no obligation.
Request a Free Assessment- At least ~$1M in EBITDA
- Stable, predictable cash flow to service transaction debt
- A capable management team that can run the company without you
- Typically 20–30+ employees
How it works
A clear path from question to close.
Feasibility Assessment
We evaluate — at no cost — whether an ESOP aligns with your financial goals, timeline, and what you want for your employees after close.
Valuation & Dual-Path Sale Process
An independent appraisal sets fair market value. We simultaneously take the company to strategic and financial buyers so the valuation reflects the real market.
Financing & Structure
We structure the transaction — seller financing, bank debt, and/or SBA lending — and design the deal around your liquidity and control objectives.
Close & Transition
We manage diligence and coordinate your legal, tax, and accounting teams through to a successful close and a smooth transition to employee ownership.
ESOP Questions, Answered
An Employee Stock Ownership Plan (ESOP) is a qualified retirement plan that allows employees to own shares in the company they work for. The company creates a trust that purchases shares from the selling owner, typically financed through a combination of seller financing, bank debt, and/or SBA lending. The owner receives cash at close and employees become beneficial owners over time. The selling owner remains in control of the board of directors until he receives the entire sale proceeds in full.
If your company is a C-corporation, you can defer capital gains tax under IRC §1042 when its requirements are met by reinvesting the sale proceeds in a diversified portfolio of domestic securities. For S-corporations, the ESOP's ownership percentage is exempt from federal income tax, which can dramatically improve the company's cash flow for debt repayment. For “C” corps, although the company in theory continues to pay income tax, the company can generally deduct contributions used to repay both the interest and principal of the ESOP acquisition loan, within IRS limits. Tax treatment depends on your specific facts and eligibility and on tax laws that may change. RBG Capital does not provide tax or legal advice — consult your own tax and legal advisors before acting.
Strong ESOP candidates typically have at least $1 million in EBITDA, stable and predictable cash flows to service the transaction debt, a capable management team that can run the company without the owner, and a workforce of at least 20–30 employees. We assess feasibility early in our process at no cost.
ESOPs require an independent, third-party appraisal to determine fair market value. The trustee representing the employee-owners is required to ensure the company does not pay more than fair market value. We help you understand the valuation process, select an appropriate appraiser, and prepare your business to achieve the highest defensible valuation. We simultaneously run our “ESOP Dual Path Sale Process” whereby we take the company out to market to strategic and financial prospective purchasers to obtain offers which will require the ESOP valuation appraiser to consider this when giving an opinion on enterprise valuation.
Yes. Partial ESOP transactions, where the trust acquires between 30% and 99% of the shares, are common. This allows you to take some chips off the table while retaining an ownership stake and continuing to participate in future value creation. While 100% ESOPs are often advisable and preferable, we frequently structure phased transactions for owners who are not ready for a complete exit.
Curious whether an ESOP is right for your business?
Start with a free, confidential feasibility conversation — no process, no commitment. Just an honest look at whether employee ownership fits your goals.