Funding an employee ownership trust: DSW offers capital for advisory firms planning a buy-out
Are you a professional services business considering an employee buy-out? Perhaps you are a founder or shareholder of the firm who is now seeking an exit?
If so, Dow Schofield Watts may be able to help you fund the deal – and to give the new employee-owned business the best possible start.
We are seeking professional services teams who are planning a buy-out and want to build their own business as part of the Dow Schofield Watts network.
Licensee businesses benefit from being part of a well-respected, fast-growing ‘challenger’ brand, making it easier to attract clients and recruit staff, and from cross-referrals within the network. DSW Capital – the company behind Dow Schofield Watts – will provide support services and infrastructure, leaving you free to focus on your clients.
For founders and shareholders, it is an opportunity to realise the value of their business while enabling their teams to have greater control over their own future. DSW Capital can provide funding to facilitate the deal and reduce any deferred consideration. Due to limited appetite from traditional funders, employee buy-outs are typically funded out of future profits which results in a longer pay-out period for shareholders and often comes with operational shackles for the new management team
How does the offer work?
Provided your business meets the criteria, DSW Capital – the company behind Dow Schofield Watts – will pay the newly-created Employee Ownership Trust (EOT) a capital sum to pay to the vendors. DSW Capital will then receive a yield on its investment from the EOT, but will never hold equity in it.
James Dow, co-founder, says: “Dow Schofield Watts is a respected brand that gives teams instant credibility, however it is made up of small advisory businesses which are all employee or partner owned. We totally understand the needs of employee-owned firms. DSW Capital will not only help fund an employee buy-out, but also gives teams the right environment to enable their future success.”