Dashboard: Where Do You Go for Unbiased Exit Advice?

Welcome to another 21 [music] Hats dashboard. I'm Lauren Feldman and I'm here with Saliqatari who is co-founder of a startup called Zolidar [music] that has an AI backed platform that's designed to help business owners sort through all of the options they face when they think about selling their businesses. Welcome to the podcast, Sali. >> Thank you so much, Lauren. I'm excited to talk about what I've been diving into the last few years. >> Likewise. Uh appreciate you taking the time. Listen, I want to hear all about Zolidar and how it can help business owners. But but first, tell us about your background. What what led you to this point? >> Sure. Absolutely. I bet like many owners who listen to this podcast, I have a winding and weaving path, but all come together in, you know, Zolidar and what I'm building today. I've been in tech my entire career, but I weaved in and out of social impact. So, I was at ka.org or for nearly a decade which is using technology to scale micro finance and while there I built product and eventually I was COO of KA when we launched in the US and all of that really helped me understand how technology can unlock advantages for systems where people aren't always able to access certain systems in that case financial systems and how different players in the ecosystem to work can work together and from there. I went to an organization called Jobs for the Future because I really did want to work closer to home on businesses that were in the US. It was fascinating to me when I talked to Uber drivers and lift drivers and where people were finding work that they believed in that would potentially be something of their dreams where they retire for 30 years. So as I was working and understanding the whole landscape of businesses in the US at jobs for the future and where technology plays a role, I got really excited about where workers work and how much investment goes into things like upskilling or apprenticeships and different things to help the most workers gain economic mobility in their lives. But this question keep coming up. What about where workers work today? What about the owners who are building businesses over time? Are they getting value and are they getting the value out of all this work that they're doing? And it wasn't until I started working directly with businesses and business owners that I happened to have a few clients that were what are called ESOPs, employeeowned companies. So that's what brought me to whoa this idea that seemed like it aligned for owners and what they needed to unlock wealth but also for employees for communities for businesses seemed fantastic but then also learned that it's been around for 50 years and it really hasn't scaled. Why is that? We started to look into that and notice there's a lot of friction and there's a lot of places where there aren't tools and luckily uh Ashish who I met as an intern in 2006. >> Ashish is your co-founder. Yeah, Ashish, my co-founder, you know, we literally interned together many years ago and didn't know that we would both come to this idea of employee ownership, how it can be so advantageous for businesses and business owners and come together and find our paths really singing. and we're both at a time in our lives where we want to build a company for our legacy. Something that we do think is going to be a business that our economy needs that will be a billion-dollar business but also has impact and be meaningful for business owners, small medium business owners to use our solutions. >> I understand getting uh getting [snorts] excited about the idea of employee ownership. I I went through that too and also the same thing of realizing how few companies actually choose that route and trying to understand why that is. But you started Zolidar with that in mind. What problem specifically were you trying to solve? >> So we started with thinking about two aspects. One being that what we know that there's a silver tsunami coming. We know that there are many small medium businesses in our communities that we go to that we frequent and we can see them shutting down. And then we think about for some of those like think about going to get your haircut or going to um your local bakery and the people who are doing your haircut are also as important as the owner of that establishment. And when we see that these businesses are shutting down, it seems like there's a lot of value that's lost. So that's the problem we were starting with and we saw that employee ownership was an interesting advantage solution. But where can technology play a role is where we started to think about actually let's step back a little bit outside of employee ownership. Even succession planning and exit planning is something that's a challenge for small medium business owners. If we look across the funnel and when I say funnel I just mean the experience of owners of businesses of advisors who are going through starting their business building it up and from that point need to start thinking about succession. There's a big drop off in people who have exit plans succession plans and who even know what to do let alone those who even consider employee ownership. So we started with first mapping the journey of these different folks and then thinking about how do we ultimately help more businesses unlock their value and succeed. And we want to bring employee ownership into this exit planning succession planning conversation. But let's first start with the fact that while millions of owners are nearing exit, many don't have a clear succession plan. There's a lot of drop off between interest and then taking a first real step. So, we want to be the call to action. When an owner is curious, we give them a next step that doesn't require huge upfront commitments. And then Zolidar will continue to build more products for those companies that do end up choosing employee ownership. But today, all our core products are useful whether you choose employee ownership or another exit path. Would you say you're more focused on promoting the idea of employee ownership or on uh helping owners understand the various paths that they have as options when it comes to succession? [clears throat] >> We've heard that actually our real value is that we are unbiased in sharing our options and we really want to just have the landscape of options more clear to owners. Exit planning, we know, can be overwhelming and it's hard to know what's real. Um, and getting to some basic answers and some of the tradeoffs often requires being able to just know what your options, all your options are. And ultimately, we do feel that employee ownership is not utilized as much as it could be. So we want to go help owners in an unbiased way see all the options. So one of our first tools compares uh financial sale to a strategic sale to employee ownership. And we believe that in many cases where today employee ownership isn't even considered, it'll win or come forward on its own merit. Um, EO wins if the company has a profitable track record, if it has operational continuity, if it there's some flexibility on liquidity, you know, timeline for the owner. But if those aren't true, you'll see that strategic or financial sale may be a better option for you. >> What's a Zalidar? What does the name mean? >> [laughter] >> We I'm g I'm actually gonna play with that and tell you what it is. But where the word comes from is solidarity. And you know if you look at different languages then the root of solidario is actually even um our URL. So solidar.io you know you get [laughter] which is kind of fun. Um but it is all rooted in solidarity and this idea of aligned incentives and how these solutions if we think about them the right way then they can really create a win-win win. >> That makes sense. I think that makes the name more memorable once you understand that. walk us through what it's like if a business owner who is interested in exploring his or her options goes to Zolidar IO uh where do you start what do you find how can you use the platform >> yeah sure um let's imagine you know an owner they can be three to five years out there can be one year out they can be 10 years out but it's I think it's an important first step we provide is called the day zero guide. For that reason, day zero can literally be I'm an owner. I'm a little nervous. My kids are not interested. I'm thinking about my future. And that, you know, potentially I'm having that triggering moment today where I need to figure out what to do with my business. And what they can do is come to our site and have a sort of private experience, so to speak, of getting their their feet wet. And by answering 12 multiplechoice questions, we generate a report that lets them compare paths and actually compare tradeoffs between these different paths. So you can actually model what if um I do or don't have a concrete succession plan with a management team. How does that impact my landscape of choices? What if I decide that I'm okay with seller financing versus not? So you don't need to come in with those answers set it. You can actually come in with the discovery and exploratory mindset. But actually I'll just tell you why we even built this or the experience is aligned with us. Ashish and I do both come from product management meaning building products and there's um there's a framework called the jobs to be done framework which we use to really understand where are friction points in the journey of doing something. And it turned out even when we were learning about exit planning and employee ownership, it was a multimonth process. We joke that it was like we got a master's degree or grad degree in exit planning and employee ownership. We have 400 rows on a spreadsheet of individual podcasts and reports that we read through. What business owner or even advisor has the time? We're all capacity constrained to be able to look through all of that and then understand what it means for me or my business. So that is literally the inspiration of our day zero guide is to create something where you don't need to either spend a lot of time trying to read articles on the internet and at the same time as you choose your own adventure in this in this tool you can find really relevant for example podcasts on a specific point that you want to dive deeper into. So that's the experience that's in the days your guide, which also is reflected in all our tools. We really took specific times or moments where we saw that owners were falling out of this exit planning journey and tried to create something that technology is good at. It's good at summarizing, creating frameworks, creating some systems, doing some modeling, and then bringing in collaboration of owners and advisors. So all our tools really let advisors participate also with owners and it lets owners sort of explore and go deep or not as deep as they want to go in their own private time and sort of doing it um in a place that they feel more comfortable without sometimes they're not ready for example to talk to somebody they just want to get their thoughts together. This lets them model some of that. Well, even beyond that, I would say, [sighs] you know, I've been in kind of a similar journey. Um, doing my podcast, I've done a a number of podcasts on especially ESOPS, but various forms of uh succession and exit planning. And one of the things I hadn't fully appreciated until I start until I started doing that and seeing it through the eyes of business owners who were thinking seriously about their options is that so many of the places where they turn to get information inevitably end up being from people who are trying to sell them something. Uh it's so hard to get an unbiased view of what their options really are. Is that one of the pain points you're trying to address? You are absolutely correct. So as we know it, you know, it makes sense that if you speak to somebody who, for example, is an expert and a specialist in selling businesses through traditional M&A that they're going to have certain incentives to bring th those ideas or that path forward. And actually in some conversations or in some circumstances that might be the right fit for you, but there is a lot of value in getting unbiased opinions before you're ready to speak to that specialist. So that is certainly something that we've heard from business owners whether it's even myths around employee ownership for example or even myths around selling to private equity. Um it's the answers they get often depend on who they're talking to. And we have yes things like the day zero guide but we also have an AI co-pilot where owners and advisors also for education can ask questions in natural language and we have fine-tuned it to exit planning and employee ownership and we even have exposed the knowledge base that we've used that the AI co-pilot is using the fact base that we've been using in something we call the grid. So we're very transparent about where this all comes from. We are using public data that you know we know there's so much good content and expertise around exit planning and employee ownership out there but often it's not all in one place and like you said certain people have certain expertise and experiences and only one path which for an owner can create a lot of confusion when you're hearing different things that don't quite come together. And so we're bringing these tools together in a way that really helps you be prepared for those conversations with the right specialists and the right experts. >> You've mentioned the day zero guide. You also mentioned the AI co-pilot. Is is the AI co-pilot available for someone to use or do do you have to re register or pay to to use the platform to get to that? >> Yeah, good question. So both the day zero guide and the AI co-pilot are free. you do have to log in um and but that's completely free. What is a paid feature is our quantitative analysis. So there may come a point where we have to put some of the features of the AI copilot behind um some payments but get in early and for today all of that is free. I think I heard you say that you expect this to be a billion-dollar business. >> Yeah. I mean, we think that employee ownership is something that can really help business resilience for every small medium business. I think today that it hasn't been unlocked for many businesses and it can be unlocked for many more. And we as a company want to build tools that are going to help these businesses for the lifetime of their existence. So as long as a company, a small medium business is succession planning and then transitioning to employee ownership and then operating as employee owned, we want to build software to help many of those use cases. And we think that by doing that in a manner that's affordable and accessible to small medium businesses, it there's such a great number of businesses that we can serve that at the same time we can build Solidar as a sustainable and big business um for the long term. >> That sounds like it could be an expensive proposition. How how are you financing that build? So actually um today we are a investable venture-backed business. Um we've raised one round of sun funding so far. So we're a small and lean team of four and a half and um quite I am quite proud of how much we've been able to build even as a very lean team. Um and from here we we hope to continue to prove that there's already this latent demand for the products that we're building and by using technology by using AI in the ways that it was that it can be most powerful by using data science we are really creating solutions for advisors who either are doing a lot of um education and repeatable tasks. This is what we've heard from adviserss. So we can partner with them. Our tools can be a companion to these business advisors to help owners and then people's jobs are actually enabling them to serve many more business owners. And that's just an example how of how Zolidar will scale and continue to build a billion-dollar business. I say that with knowing that, you know, while I was working in a nonprofit at KA, we we were able to do scale in a different way but to billions of dollars in loans. So, I have the same passion for really impacting millions of businesses, millions of workers, millions of owners. And I do think that there's a way to do that in a way that's also good for investors and good for our local community. >> It's kind of intriguing to me that a venturebacked business is seeking to uh encourage more employee ownership. there there isn't a lot of uh interaction between the VC world and the employee owner world. Do do you see that as a little bit of an irony? And do do you see ventureback companies as a potential place where employee ownership might take more of a a role in the future? >> That's funny. It's yes and no. I have so many points on that. So one um is actually I've benefited benefited from a form of employee ownership being someone in tech in my whole career. Right? So there's the Googles of the world. Many of us employees have stock in those companies and actually that was part of my compensation in many of these companies. So what we want to do is actually bring this idea of ownership and equity to many more people and employees and make broad-based ownership a reality for people who work in privately held companies and smaller medium businesses. So actually in some ways it's quite aligned with that type of businesses that VCs support and um also if we think about who's investing in us they're going to invest in us in some ways you know and I want them to just like they would invest in another company because I do think we need to start talking about employee ownership more from a pragma pragmatic lens And it does have value for owners, for businesses and what I believe in from from the even the mass of the deal so to speak and also it has social impact. But I think that often we talk about employee ownership in a lead in leading with the impact perspective rather than the actual business case for employee ownership. So it in my world I actually think it aligns because I think there's a business case for it. Um actually I think you had a guest um also right team shares who has a completely different model than us but that has initially been invested in through VC. So I really think this is one of those ideas have so much appeal whether it's from the fact that policy tailwinds are supporting employee ownership and it's nonpartisan whether we're talking about the types of investors both impact first and you know those who are looking for financial returns and then again both for the owners and the employees. That's what's so, you know, fascinating about this model is that it actually has been proven and has tailwinds behind it. If you look at many, many different groups of people or personas. Sali, when we spoke in preparation for this call, you brought up something that I haven't seen anybody else refer to and certainly had never occurred to me, which is that employee ownership might be even more valuable going forward given the rise of AI. Can you tell us why you feel that way? >> Yeah, absolutely. You know, there's so much talk, right, about how how will AI impact smallmedium businesses, owners, and workers. And I think that you can make a case and you can believe in either case that, you know, AI is going to come immediately tomorrow and, you know, potentially take a lot of jobs. There's a lot of fear around that. And then there's others who say, "Hey, look, there's a lot of businesses and industries, especially small medium businesses, where it's going to take decades before AI comes in and really impacts workers." And I I always think it's funny to answer that both things can be true. I do think both true at the same time. But what I think is even more critical and gives me a lot of um ways to talk about employee ownership differently is regardless of which you believe is is AI going to come and take jobs tomorrow or is AI going to you know just be a companion as in many decades. In either case, employee ownership will create good incentives and alignment and benefits for our workers and our communities. So what do I mean by that? Very specifically, take either scenario. Take the scenario where AI um is going to come slowly and let's have workers be part of how AI is implemented. That's what employee ownership helps to support. Employee ownership is not employees make every decision, but it does allow for more participation and employees to be incentivized to think about how the business will run, including how does AI, how can AI be applied in their day-to-day work. It gives them an incentive to think about how should we incorporate AI and make this business more healthy for the long term. With employee ownership, they're not have a stake. On the other hand, if you have employee ownership and robots take over tomorrow, at least in this way, now employees are participating in the financial outcomes of that reality. So, we've created stability for these workers and for, you know, the the businesses themselves >> as if it's sort of an insurance policy. you you could lose your job, but at least you'd have a stake in the business that goes on in a more efficient manner. >> Yeah. And the value you put into that business over time, right? Like we we all own employee ownership is a form of equity. And just like home ownership has created for those who have it long-term stability, generational wealth, that's exactly what employee ownership can do. It's this systemwide solution that can support the gener generational outcomes that we want for our communities and for you know whether it's workers like I said or owners. >> I I have an anecdotal sense just from doing the podcast that I do and the newsletter that I do that there's tremendous interest in all of these topics uh succession planning, exit planning, employee ownership uh all the various forms. Have you done any explicit market research to test how business owners respond to your platform and the idea of having this uh opportunity to assess their options? >> Less some market testing and more so our product is out there. We've had hundreds of users go through the platform. Where we're focused right now is on actually thinking about partners who work with many business owners and it's again because we thought about this I know I'm saying this user journey a lot because that that's really how we came about this. So one other journey that we've we were thinking about is how do owners even hear about employee ownership? How do they even hear about exit planning? There are very specific um webinars and programs for example in various cities where we know that thousands of business owners became aware of employee ownership. Um, there's been millions of dollars that have gone into awareness building where employee I mean sorry owners were interested and were coming to the table to learn more. But what we discovered is that there wasn't really a call to action for them after this awareness building had occurred. So what we're doing is we're building these specific things smaller step owners can do once they become aware of employee ownership and we're partnering with for example employee ownership centers various types of advisors so that owners can now not just be aware which we know that they've shown interest and they're aware of it but now they can actually see how may it work for me and my business. And that's what people are getting really excited about is going beyond the awareness and into actual conviction building, I would say. >> So, I'm going to include a link in the um the show notes for this podcast and also I'll I'll put it in my newsletter as well. But now now that we've had this conversation and people know a little bit more about what you're doing, tell us again about the the day zero uh link and what why should someone go there and what will they find? >> So people should go there to understand what are their options and have confidence around the topic of exit planning employee ownership. As I mentioned, it can be somewhat overwhelming, but this can be something you can do wa in literally in front of the TV [laughter] in terms of the very first intake. You can do it with your son or daughter. You can do it with your fractional CFO, with your adviser on your own. Take 12 questions, multiple choice. It's private only to you unless you decide to share it. And what you get is literally like I said a choose your own adventure where you can look along nine dimensions of your decision exit path decision whether it's liquidity sales price how long the transition will take. Those nine dimensions will be compared for you across financial sale, strategic sale or employee ownership with insights on what would make either of those paths more feasible for you and even where you can go deeper and say, "Oh, okay. This path looks interesting based on my liquidity needs, but now here's a little podcast or recording of a case study of exactly a business owner that did did this." So you get those kind of resources by going to this guide. >> And in this guide, are you asking questions about the finances of a business? Are you asking for, you know, private numbers? >> No, not this guide is purely qualitative. So we do ask you a multiplechoice question about the profitability of your business. And all of this is editable. So it's more as um a scenario planning tool and a modeling tool in this 12 question qualitative Q&A. There is a another feature where we do ask for business data which then gives you deeper quantitative analysis still lightweight and still much more affordable than your alternatives. But yes, in this first step it is um probably not data that you would be concerned about sharing and if you want to you know just just feel comfortable in taking that first step. >> But down the road if somebody so chooses uh you do request that data with the idea being that you can help uh a business owner figure out what's most appropriate given the status of their business. Would they would the business be profitable enough or big enough to consider an ESOP or the other options? >> Exactly. So this is another this other tool is again something that um is purely in the hands of the owners. So they can enter the data, connect to QuickBooks and completely without a human in the loop at this stage. And they can of course invite someone to fill in the data for them, but we've had owners do it themselves and feel quite comfortable in entering that three years of historical financials. And from that data, we're able to produce from a model that we've built in house. Um quite an in-depth report. That one section of it is a valuation. Um it's actually shows you multiple methods of calculating your valuation and explaining how that valuation is created. um as well as then giving you again a lightweight model of your seller proceeds along different paths. So you can compare comp compare a third party sale to employee ownership. It also shows you your KPIs and calculates that for you. So it is a financial planning tool that has actually 46 different tabs. So, it's quite an in-depth report that allows owners at any stage to actually see how different options may compare again with their own data. That's the clarity we're hoping to provide with again everything's editable, sharable as much or as little as they want to. And we do have an online um completely free demo of all our features. So if somebody first just wants to see what type of reports are produced, they can go to our website and go to our product demo under resources and simply log in with their email and be able to have full access to sample companies. >> Saliqatari is co-founder of Zoladar. If you want to learn more, check out the link in the show notes or also in [music] Friday's 21 Hats morning report. Sali, thanks so much for taking the time. >> Thank you, Lauren. and I really enjoyed it and I look forward to speaking more. >> Likewise. Uh whatever uh whatever people find, whatever people think, um this is going to be I I think a [music] really interesting uh learning mechanism and I very much look forward to keeping in touch. [music] >> Sounds great. Thank you so much. Bye for now. >> Thank you.