Owning the Future: Creating the Next Generation of Employee Owners

good afternoon everybody and welcome to our fourth and final panel of the day thank you all for being here once again um we've got a wonderful panel of Market leaders in employee ownership here and in just a moment Senator Chris Van Hollen of Maryland will be joining us to give some brief remarks um before we wait for the senator I'll I'll kick us off on the topic of the panel this is about owning the future and creating the next generation of employee owners and as we've heard up first of all you remember earlier I'm Jack Moriarty I'm supporting The Institute and I'm also in my day job the founder and executive director of ownership America which is a non-profit public policy organization a think tank focus on scaling employee ownership and in particular doing so through addressing access to Capital issues and financing issues from a policy standpoint and so that's why I'm so thrilled to be here with as I mentioned four Market leaders that are already in the capital markets working on this in some cases at the Forefront or representing investors that want to see more opportunities to invest in employee ownership and grow the field with that I'd love to introduce our featured speaker Senator Chris Van Hollen Senator Van Hollen is the junior United States senator from the state of Maryland the senator has been a strong proponent of equal rights Equal justice and equal opportunity he's been a champion of creating an Economy based on good quality jobs which includes of course his tremendous support of employee ownership the senator started his time in public service as a member of the Maryland state legislature and he's admired by leaders in both parties for his commitment to bipartisanship which includes his lead sponsorship of the recently introduced bipartisan bicameral employee Equity investment act which he will discuss with us shortly thank you senator for being here and for your leadership and promoting this issue [Applause] well thank you Jack for that very warm welcome even more thank you and others in this room for your focus on trying to grow the number of employee-owned businesses in the United States of America and I'm really grateful to the organizers to Rutgers and the Aspen Institute for convening this because I think this is an essential and important issue for the future of our country and I'm glad you've already had the opportunity to hear from some of my colleagues from the house and the Senate and I apologize if I repeat some of what they said I do want to give a special shout out to my colleague and senior senator from from Maryland Ben Cardin who I think was here earlier who of course chairs the small business committee I'm going to miss him he announced his retirement but I keep telling him he's got another 18 months and one of the things we're going to work on in those 18 months is import employee ownership and he of course has been active in this area including the legislation he probably talked about in terms of providing more tax incentives for employee ownership look um I I I'm not going to spend a lot of time trying to convert all of you on the benefits of employee ownership I'm guessing that you're here because you already understand how important it is but I do just want to highlight and summarize some of the things we we do know which is all the evidence indicates that when you have employee ownership of a business productivity of employees is up resilience is strengthened because if you look at these companies when the economy goes bad or tough times hit they find a way to more easily adapt and of course there's more shared prosperity and that makes common sense because all those employees not only have a stake in getting their next paycheck but they have a stake in the success of the company and the wealth that can be built from the company so that of course is is the fundamental idea is to have more shared prosperity in the and the figures bear it out employee owners uh retire with about three times the assets of employees that are not part of employee owned businesses so this is clearly a good thing for the workers it's a good thing for our communities it's a good thing for the country but we don't have a lot of them if you look at the share of employee-owned businesses in the economy overall it's pretty small and it's been flat for about 10 to 15 years in Maryland for example we have 125 companies that are employee owned they're really good but 125 out of thousands and thousands of companies in Maryland is obviously a small figure so we know it's a good thing what are the barriers and there are a couple there carriers one is education awareness I mean there are lots of small business owners who are not familiar with this model and that is something we all need to work on another is complexity and the legal challenges of converting and there are substantial legal challenges that people have to go through in order to make this kind of conversion and third and most of all of course is the financing the capital that you need to bring to the table if you're an owner and you're selling your business if there's not a neither another source of capital out there you of course have to self-finance it and that means that you if you're in the first of all you have to be in the position to self-finance it and usually means that your return on that sale to your employees takes place over much longer period of time than obviously if someone swooped in from the outside a private Equity Firm and just bought it right then you have your cash out and your your done but if you're in an owner who really does want to leave that company in the hands of the people who have made it productive for you you want to know about this option you want to find we should find a way to streamline the the conversion and we want to find a source of capital to really address that very big issue and so we've introduced legislation that aims to tackle these issues especially the financing issue and access to Capital it's called the employee Equity investment act I'm very pleased that it is bipartisan so in addition to a number of my fellow Democratic senators we also have on board Senator Rubio senator young Senator Braun and a lot of them have important roles or now and in the past on the small business committee which turns out to be the place that this this legislation will go so I'm very pleased also to have my senior Senators chairing that committee and as I said to him he's got 18 more months uh here um we got to get that passed I I understand you've heard a little earlier today from uh Jim Bonham with the ESOP Association we've worked closely with people like Jack and with people at the ESOP Foundation as we put this together to try to address a lot of the issues which obviously come up when you're trying to do something and we settled on this idea of using an existing model using an existing platform at the small business administration and the current platform is called the small business Investment Company program and it was established decades ago because of the challenges small businesses were having to access Capital they were smaller they were riskier they didn't necessarily have a big track record and so by law this was established to help provide incentives for others to bring Capital to the table but at the end of the day those who are bringing Capital table are actually financing the costs of the program itself and are also taking the greatest risk ultimately because their capital is what's burned through first before you get to any guarantee from the small business administration and the government so we we use that platform and we want to build on it to not only encourage Investments small businesses but specifically Target investment for the purpose of establishing employee owned businesses and helping those that are trying to expand the number of employees participating in the business and these are called the employee Equity investment companies that's the parallel to the small business investment companies and it's important that we launched this now because we are experiencing major demographic changes around the country I I suppose others have probably spoken about the silver tsunami already but right now we're projected to see that the owners of 2.9 Million small and local businesses employing 32 million Americans are likely to retire soon these this is the baby boom generation of small business owners and they're going to be retiring so what's going to happen to all those small businesses well it's very possible that outside private Equity firms will come in and you know somebody on Wall Street may say hey that's a really good Target that obviously is not going to make the employees owners there and a lot of these small businesses as you all well know are also connected to our communities contributing to our our communities they're our neighbors they're part of the Little League they're part of the social fabric of a community and it makes a difference to have the employees as owners and also owners who are part of the surrounding uh community and so given what we're facing in terms of the silver tsunami we think it's really an important moment to move on this effort if you look at the current figures in terms of ownership at least of public companies you'll find that 40 percent of U.S corporate stock is owned by Foreign Nationals and our goal is to make sure that as these these small businesses you know their owners retire that instead of being bought up by private Equity firms including a lot of folks who may be foreign investors that the investors be the employees themselves and that the beneficiaries be the employees themselves and so that is what this is all about it's about making sure that we can achieve this goal that everybody talks about but it's always been hard as you look at the trends over time to to accomplish which is a more shared prosperity and I understand if we pass this legislation we're not going to wake up tomorrow morning and and see everything transformed but by providing this mechanism I am absolutely convinced that uh over time we will definitely see the growth of employee owned businesses we got to take away the we got to make it more people more familiar with the model we got to get rid of some of the the legal barriers while also making sure that we're protecting employees and this bill in my view does exactly that and we've got to address this big financing piece so thank you all for devoting this time to this this goal and I hope all of you will join our efforts and encourage all of our colleagues uh to pass it and I I do want to thank our house members who are leading the effort Dean Phillips and Blake Moore are that are the primary co-authors Christy Houlihan I don't know if you heard from her yet but she's also a co-sponsor in the house so whatever you can do I mean you can be our best ambassadors here in terms of reaching out to other members to make sure that we get this over the finish line and I I do think there's a lot that we're not going to be able to do in the next two years given the sort of political division but the fact that we have bipartisan support for this bill makes it different than a lot of other proposals that are out there so we really want to invite you to be part of this this effort so thank you very much for having me mm-hmm and I do want to thank Harry Stein who's right here in the back who's you know really put an enormous amount of effort as I my point person on this thank you well thanks so much Senator and thank you Harry while uh I'm gonna go ahead and take this opportunity to introduce our esteemed panel I'll also note that that Congressman Dean Phillips will be joining us a little bit later on so part of the dance is we'll we'll maybe have to pause things and bring the congressman in but that's but that's how we How We Roll here so um as I mentioned this uh you know the Senator's comments a perfect segue to thinking about how do we address financing barriers and I'm thrilled uh to be introducing uh my colleagues to my right um starting uh with Regina Regina Carls is a managing director of the ESOP Advisory Group at JP Morgan she is dedicated to helping bankers and their privately held clients evaluate the benefits of selling stock to an ESOP and therefore creating liquidity for the owners in the transaction Regina was responsible for the initial development of the ESOP Advisory Group she quickly became liaison with all areas of the firm assisting in the analysis and structuring of complex ESOP financings Regina has been with JPMorgan for 30 years prior to spearheading The Advisory Group she was a division manager within Middle Market banking she's gained broad experience during her career with the firm and received a bachelor's degree of Finance from the University of Iowa and holds a master of Business Administration from DePaul University she is licensed by finra with a series 24 series 63 and 79. she's a recognized expert and frequent speaker in the ESOP community and in 2014 was appointed to the advisory committee of eska she is a member of the ESOP Association headquartered here in DC and serves on their Banking and finance committee and finally Regina is an active member of the national Center for employee ownership and Ohio employee ownership Center uh is my immediate right bill is a founder and partner Bill Hayes as a founder and partner at mosaic Capital Partners employee ownership focused private Equity Firm he currently sits on the board of directors of Express medical Transporters etac systems and Lynx Global Solutions prior to founding Mosaic Capital bill was head of corporate credit for Deerfield Capital Management and managing director with Babson Capital Management bill is a graduate of the Citadel where he was commissioned as an officer in the United States Army Mosaic Capital provides mezzanine debt and Equity to Middle Market companies with greater than 10 million dollars in revenues for change of control transactions bill and his team recognize that a family-owned business is more than a means of wealth creation it's the manifestation of optimism determination and a willingness to take risks key values worthy of passing on to the next generation of family management and employees Todd Leverett is a co-founder of apis and Heritage Capital Partners an impact focused private Equity Firm that looks to address the nation's racial wealth Gap by using the power of employee ownership prior to co-founding apis and Heritage Todd was the program manager of Legacy business initiatives at the Democracy democracy at work Institute a national non-profit that leverages employee ownership models as tools for racial and social Equity Todd is also a former wall Streeter startup co-founder and Independent Business consultant who has dedicated his life and career to leveraging the tools and best practices of big business to empower communities of color he received his JD MBA from Columbia University and is a Phi Beta Kappa graduate of Morehouse College and last but certainly not least John Cochrane is senior manager policy and programs at the U.S impact investing Alliance the alliance is a non-profit organization dedicated to building the impact investing ecosystem by bridging Market gaps and addressing shared challenges at the alliance John helps to lead a range of program areas including public policy advocacy investor engagement and education and the work of the global steering committee group on impact investing prior to joining the alliance in 2017 John was associate director for social Innovation at the Council of Foundations where he created an impact investing program to educate and train Community corporate and private stakeholders he's also worked with the inter-american Development Bank White House Business Council the U.S state department and Morgan Stanley so thank you all for being here I'd love to kick things off uh with with a sort of a macro question all of you are are either directly operating in capital markets or you're you're directly adjacent if you could start and we'll start with Bill and go down the the row here just give us a sense of the ESOP Market we know the demographic challenges we know some of the interest rate environment the FED met earlier today and and paused on a rate increase but we've certainly seen a lot of changes from a monetary policy standpoint give us a sense of what are you seeing in the market and and tell us more about your specific investment strategy true Middle Market sorry about that well can you hear me closer all right we'll try this not not used to doing this folks as I was saying uh we are a small business Investment Company so by the very nature of that we're focused on the lower end of the Middle Market um typically our companies have five to eight million of The Da so that's pretty small business we've done 16 companies uh since 2013. created over 2 600 employee owners through that process and we are in the licensing process for our second fund to do that very strategy having said that we're a bit of an odd duck at SBA we're the only fund license to do this at this point we typically uh uh different than long ago where you you use shoe leather you went and you met business owners and you started pitching ideas most companies that we see are now represented by investment Banks some big in Banks some small local Niche and the goal is to drive the highest value for the owner of that business and as a result we compete with other private Equity Funds that might be looking to buy a company of that nature as well as strategic buyers so larger companies or companies looking to roll up and add to their business line and so we have to be competitive in that process and some of the unique features of ESOP transactions allow us to do that I think one of the biggest impediments that we consistently see is because we bring Capital we know Banks other funds that help raise the capital needed to do the transaction but it's getting a price that the sellers willing to transact they they don't want a partial exit from their business they would like full liquidity because they're doing Estate Planning and other things that they would like to move on with a business and in our transactions we're typically able to get them about 90 percent of the liquidity we do like to have them roll over a piece so that our interests are aligned with theirs over time and often we see them involved in the business post-sell of the transaction at least for a few years but often throughout the life of our investment and I think the others will say that that's probably the biggest impediment to convincing a seller to do an ESOP is the ability to get full uh liquidity of the transaction versus taking the seller notes that Jack had mentioned earlier Mansion can you guys hear me okay it's red it's red can you hear me okay sorry um so as Jack mentioned I head up our ESOP advisory practice for the Commercial Bank and our team has been around I founded the group 16 years ago I've started on the commercial side working with business owners financing corporations my whole career and always looked at this we were the benefit of a lot of practitioners who are in the room here today some good work that's been done to really expose the market to to esops and it was interesting when I got started it was one of those areas that I approached the bank three times to start a Practice Group and twice was turned down told that it was you know not not a big enough market that we did esops within our portfolios but the reality was we did them but I don't think we knew what we were doing and I said it's really the least understood Corporate Finance tool out there and so fortunately after the you know three is a charm uh they came back and asked me to really Greenfield a group and um I've been doing that for 16 years uh it's been a very successful group within our Commercial Bank and I would agree I think starting with awareness I've heard that multiple times today I think back when I started the group awareness was a big issue um people hear of it they don't really understand it the other piece of it I'd say is um it's you know dispelling the myths there's you know you always talk about the financial advisors who have the ear of the owner and many times when you talk about an ESOP to these owners they'd say oh I talked to my account and they they you know they said that's not the the option to go or you can't get what what they're representing or an ESOP causes a company to fail and you know I quickly come back to the argument that it's not an ESAT that causes a company to fail companies go through Cycles you know we work in the banking industry banking your clients have problems it's how you work through those problems and I would argue that the esub structures especially in this 100 S structure actually gives them you know a little bit more of a tax shield to to sustain some of that that volatility and as a result we've seen you know great performance within our portfolio and I think when I talk to my other competitor peers out there we all can share in that and we can talk about that a little bit as far as the the capital restraints um I would agree that there are transactions that were that will limit uh business owners who may want to get more cash up close so I would say it's not the entire universe and I can look at some people in the room here who've gone down the route who actually enjoy a bigger seller financing components of transactions so it's really bringing you know Capital to bear and I can talk about a transaction where that that came in whereas it was important based on the age of the owner um but I think overall as a space the awareness is there I would say you know it's going back to my role as an advisor or an advisor group within the Commercial Bank that's exactly what we're doing we're spending our time going across the country meeting with our bankers and Underwriters our private Bankers to really educate them on what is an esep because I think most people and before I started this this this role I can tell you when you say what is an ESOP people would say ESOP beyond that they didn't want to have to get into the weeds and I think the the you know the technicalities of an ESOP at Times May Scare companies off May Scare Bankers off because you do have to invest in it and that's why we set our group up the way we did that we work exclusively with these subs and we don't just get in the transaction at the initial formation we're staying in through the life alone and I think the other difference with with my team is you know they always say surround yourself with talent I have some exceptional Talent on the team when you look at what is involved in any sub transaction it's various disciplines and I have former valuation practitioners I have a former attorney a trustee I've got actually an individual on my team that used to be CEO and CFO of any sub company and so you know we're seeing more and more of this and more and more banks are entering the space which I think although somebody mentioned it's good for us that that know how to underwrite to any sub company the reality is every Bank should understand this because if they do have the ear of these owners and they need to be able to represent this is a viable transition because the last thing we want to be doing is is terminating esops because they didn't know what they were doing great good afternoon everybody uh thank you for the opportunity to speak today my name is Todd Leverett I'm co-founding partner of apis and Heritage Capital partners and as Jack mentioned we're a lower Middle Market buyout fund that focuses on converting closely held privately held companies to employee owned one thing that makes our firm unique is that we focus on companies with diverse workforces so we will only convert companies that have at least a third of their Workforce being a bypoc Workforce and we also folk on those focus on those workforces that are majority low and moderate income so today we have two companies within our portfolio a landscaping company in El Paso and a plumbing company in Denver that represent almost 250 families over 80 percent of the workers are bipoc and the majority of the workers are low on moderate income so we really see this as I think everybody hears sees this not just as a solution for owners but also for workers who need opportunities to build wealth who've been locked out of those opportunities by other means of who are diverse and not diverse every worker within our portfolio gets to participate um you know I'll take us take a step back and talk about the state of the ESOP market and Senator Van Hollen talked about this before I'd like to kind of just frame it as you know two pieces there's a big opportunity um and there's a there's a big risk and often those are the different sides of the same coin so the opportunity is really related to there are especially in the lower Middle Market where where uh bill and I play there are a lot of companies that are that need to transact a lot of sellers who need to to exit um and you've you all probably heard silver tsunami 100 times a day so I won't say that but I'll I'll kind of say it um when you look at the market for especially lower Middle Market transactions there are just huge amount of opportunity um and on the risk side there's a ton of you know over a trillion dollars of dry powder in traditional private Equity spaces looking to consolidate that that wealth building power and uh the hands of a relatively small number of folks and then you have have other models that are able to take that wealth building power and make sure it's dispersed a little bit more more broadly again not to not to talk negatively about our traditional private Equity Partners but I think when you're an uh investor when you are someone an economic developer or somebody who's thinking about not just Returns on investment but all the externalities that come along with where Capital goes and um I think you know looking at I think about if you're a state pension fund you know investing in something that's not just getting you return on your dollar that but that's also preserving jobs in the state that you care about so making sure your your outcomes are aligned with your investment is really important and we think this model does that in Spades when done the right way so tremendous opportunity but also tremendous risk in that if we we don't jump on the opportunity then we probably won't have a window of uh investment like this with all these businesses looking to change hands for a long time if ever so happy to be here today yeah John I'll bring you in as someone who's sitting in a little bit of a different position representing investors that care about impact but they also are are competitive investors they want you know attractive risk adjusted returns how do you view the intersection of employee ownership and the other priorities of your investors what's the appetite for seeing more investment opportunities in this field and I'd love to give your perspective on those issues yeah thank you um there we go uh and I think I'm in the unenviable position of probably knowing the least on this panel about employee ownership uh but I know the most about how to work the microphone uh having watched everyone else so well positioned so yeah as Jack said I said at the U.S impact investing Alliance and to say just a bit more about who we work with we represent a range of investors including foundations High net worth individuals increasingly corporate investors corporate Venture Capital funds and the like who are seeking to invest their Capital to Achieve Financial returns as Jack was just saying uh positive Financial returns but also to achieve positive and measurable social economic or environmental impact through those investment decisions in addition to the asset owners that we work with we also have a number of intermediaries wealth platforms fund man managers Etc who are represented on our various advisory boards and councils and so collectively our asset owners hold hundreds of billions of dollars in capital and the managers are responsible for trillions of dollars in capital um and across that there is a broad range of expectations for what they're going to achieve through their investment decisions and so when you talk about impact investing sometimes it can be hard to pin down what that says and we're not always helpful because we do look across the Spectrum from folks who are you know willing to really make a concession to achieve the impact that they're seeking but as Jack was pointing out it definitely goes through to folks who are looking at a sort of attractive market rate returns um and so why did we get involved since as I said you know I don't know all that much about how to actually structure an employee-owned company that's not my role what brought us to it and I thank Senator Van Hollen started to bring it up uh Todd was mentioning it there is obviously this silver tsunami conversation but it goes beyond that too there are so many other factors that I think make this a critical conversation right now and one that the investors that we represent are extremely interested in so you could look at everything from the lingering effects of the covid crisis and the disproportionate impacts that had on small businesses especially minority-owned small businesses you could look at the sort of supply chain challenges that that highlighted and how we need to think about keeping the sort of small producers that are doing good work in this country in place so that we push back on that and grow them and make sure that there's an opportunity to grow into all the opportunities that you know are presented to us with the sort of ongoing economic transitions that we see um our president uh at the U.S impact investing Alliance Franc Siegel who unfortunately couldn't be here today just because of scheduling she had the chance to sit on the good jobs initiative that we heard about earlier from our department of labor colleagues and so that is really you know the Confluence of those macroeconomic changes the desire that we see from investors uh to pursue these positive social economic and environmental impacts and the commitment that we see right now from government to promote good jobs that really brought us into this thinking about okay what is the role that investors could be playing and employee ownership was a really natural extension of that so we have seen just incredible interest from the members that we work with the investors that we work with in being able to be a part of this growing conversation about employee ownership but to pick up on what Regina was talking about you know these are not uh you know there's a lot of uh and and what we heard about earlier in the panels that I was able to attend yeah there's a lot of capacity needed to be able to do this right to do this well and you're not going to build that out inside of a foundation you're not going to build that out inside of a family office you need to be able to work with the kinds of sophisticated Capital markets intermediaries to my left who are able to do these deals well to structure funds that are going to be successful and so that's why our members are eager for and what I think you know the policy being Advanced by Mr Van Hollen and his colleagues presents an opportunity for is to get more of those sort of critical intermediaries in place that really build the infrastructure so that we can do more of these deals because the interest is there from the capital that we work with but they sort of need the opportunities presented to them absolutely well thank you John we've heard a bit now both from the Senator's remarks from the congresswoman uh earlier and and others uh about this this seller financing barrier and how um you know transactions when you have a a sponsor a fund sponsor that it is putting forward an ESOP strategy that it's an unusual uh you know it's a bit different than your traditional structure so I'd love you know Bill and then Todd and then I'll bring in Regina I'd love to just a little a little bit more in the Weeds on you know how does that actually look in practice Bill you'd mentioned that you are participating in auction processes with traditional intermediaries right that is an unusual Place often for for the ESOP model to play tell us about that experience when we set out can you hear me now when we set out with this strategy uh what started back in late 2011-12 um we felt we were trying to serve this Niche that had not been served by the capital markets because these companies are great Investments for all the reasons we have discussed but pretty much ignored by the normal Capital markets uh with regard to the junior capital um and so we went through the process to get licensing but our structures look really no different than any private Equity buyer or strategic we raise some senior debt from Banks which is 25 or 30 percent of the total purchase price we work with other funds many of them are sbic funds that do traditional mezzanine debt lint kind of Junior debt lending and that our fund provides the junior Capital which would typically be funded by the equity block from a private Equity Fund we use some of the unique laws around esops to make that investment where we don't own the company work out economically so we're getting equity-like returns but in the process of doing that we're creating a significant value to the employees that they don't have to pay for the management ourselves is kind of a sponsor and the the outside directors that we bring in sit on a board and really guide strategy and solve problems and bring resources to bear at the company level so in that regard we don't look terribly different than a typical buyout but the structure of our Securities is different the the new act takes account of that and we've been able to make it work I think that's pretty much I'd say on the structure and and what I'll I'll add to that to do the the compare contract traditional private Equity you know on you know I'll talk about our transactions but I sure live it applies to yours as well on day one of the transaction when the senior lender brings in the capital our team brings in the capital as soon as the papers are signed the company is not owned by a person Heritage or not owned by Mosaic and just want to accentuate this point bill it's a hundred it's 100 owned in most cases we can go down to 80 by the workers at the firm um and we will sit on the the balance sheet so to speak as a a debt a mezzanine debt product so it's really important for for the model for several reasons for these companies to be 100 employee owned on on day one one I think that the fact that they are in reality 100 employee owned is very meaningful not to just to us but it's very meaningful to the to the employees and to the workforce and so one of the first things we do is bring in our artistic director from the fund and they add the words 100 employee owned to the logo that's that's the first change that happens old logo just add 100 employee own um but what I think that represents is this concept and idea uh um I know that we espouse at a h that ownership is is you can set up the cool you know uh retirement account but real ownership is is more than that and if you really want to see a lot of the improvements and the research shows this that you see an employee-owned companies where they're able to withstand downturns better where they lay off less employees where they grow faster it's really important to pair with that cool ESOP retirement account start to really create a culture of ownership with those workers and this is something you can do whether or not you have an ESOP or not but it's a lot more effective when the when the financial reality is ownership and so really coming in and our partner dowie democracial work Institute comes in partners with us in these firms and starts to create a ownership culture where these workers really start to see the connection between their life and their well-being and the quality of their jobs and connect that with the success of the company um I think I'm way far off the question um but the con the idea is on day one 100 employee owned but until you really start to build that culture of ownership in our heads it's not 100 employee owned to the workers understand it and until it starts to change the way that they engage with their work and make the make the business better so the financing in the the reality of the culture kind of go together well let's turn our attention we of course heard from the senator on the employee Equity investment act and others today first a bill and then Regina bill you sit in a unique position given that you are an sbic licensee you have some experience with the program tell us about what that experience has been like I know you're you operate a little bit differently uh than your traditional sbic fund so tell us about a little bit more about the sbic program Senator Van Hollen gave us a little bit of background context uh your role and then you know where you see the opportunities in the eia to to you know accelerate its potential sure just a little bit of background the the sbic program was established I think in 1958 and the goal was to have private capital and the government partner to provide Capital to smaller businesses uh in order to as you well know most employees are employed by small businesses but the goal was to energize the economy and grow and so that's been a hugely successful program um most sbic's and there's 350 or so at any given time are focused on mainly mezzanine debts and provide more senior debt similar to Banks because some companies Banks aren't interested but sbic funds will often step into that based on the profile of the company some of those funds will do small pieces of equity-like Investments and there are a few that maybe do 50 50 but there aren't many of those so when we came into the program effectively making debt Investments that look like Equity we were a bit of an odd duck as I said earlier and so and there's not a lot of institutional knowledge within SBA around esops they know a lot about small businesses and the things around that program but not very I would say very little knowledge institutionally around esops and so we've spent a tremendous amount of time and effort uh educating them both with our first license and then due to turnover of people we've had to do that with our second license and then there's turnover in their investment division that monitor and work with you throughout the life of your sbic fund that we continually do educational efforts there so that they understand the life cycle of an ESOP how are they structured how do you get in who are the parties to the transaction what controls do you have as an investor how do you get out of your investment so we're continually doing that and I think the office of employee ownership that would be established by the bill would would be huge in establishing that institutional knowledge and also enabling other management teams such as ourselves to use this program to bring more Capital to the lower Middle Market and in particular I mentioned we've done 16 companies about 2 600 employees that's working within the size standards of the current sbic program but with the new act it would triple the size of the companies that you can invest in so for the same effort that we put forth we could have touched three times as many people and so I think that's a big part of the new program Regina from a senior lender's perspective tell us a little bit about you know the potential opportunity of having more fund sponsors into the market in a more Junior subordinated position and and also as you've gotten up to speed you know where you see opportunity uh in in the in the new legislation um well I think as we've said the majority of our transactions today have gone to 100 us corpus up route just because the the benefits afforded to that structure um we do have situations as I mentioned before that that you know they're the additional Capital that need is needed to be brought to the table um through mezzanine additional cash at close would encourage more business owners to consider an ESOP it doesn't discourage overall uh companies from pursuing this path but having more Capital at the table would be you know impactful I would say in the economic environment we're in right now the other benefit would be you know risk and the fact that you know as the banks and lending markets change um you know we've seen it from you know recession to growth to recession the bank markets change and so the amount of financing that we're able to bring to the table will change as a result of the economic conditions and having a layer Capital that could you know basically bolster the capital structure to fulfill this this uh ownership transition I think would continue to drive more more activity in the space a lot of people ask me when they're when the markets change are we going to see Subs dry up and the reality is um we did not we we see more transactions closing they may go a you know predominantly seller finance route and they wait till the markets improve and they come back to the market and recap it through the senior market so it's just a this to me would be a flexible tool to bring to the table to bring some cash because obviously that's important when you anytime you're transitioning a business to the business owner wanting some Capital at close this kind of provides that layer Capital that we otherwise wouldn't have Todd you know we've talked about relationships between supporting lenders with with banks uh tell us about the interactions with sellers right you've done a couple of deals now at least um and how that conversation has been um that may not have been possible Right potentially uh if not for your Capital solution yeah I'll tell you even before we went into the the market with this model you know we wanted to to get as much of a view and perspective of it as we could so we spoke to the team at mosaic spoke to the team of American working capital and some other folks who had who had engaged with cells around the model um and and you know what we heard from them is is really what we experience which is when you tell people and I also had this experience working in the non-profit world when you tell people that there's a very real tangible opportunity to move a business the ownership of the business from the the owner to the workers I mean the the level of first you know confusion because the concept of disbelief can confusion because the idea and I think this is part of the the Zeitgeist of of ownership and I think we live in the age kind of like the hero entrepreneur right like only one person could have started this business only one person keep this business going where the reality is if you have the right support if you have the right leadership structure if you have the right financing um and you know businesses can can succeed with all that but but the excitement of a owner who has no idea where his or her business is going to go when they exit and leave um are they going to have to sell it to the competitor down the street who they hate who they never want to sell the business to or to another sort of investment firm that they know is gonna is gonna you know start cutting heads immediately and it's funny sellers always know who's going to get fired first when they sell to the you know to traditional buyer and so to present them with an opportunity where the the the investor or the the buyer is the the worker the next question is they can't afford it and the capital that we bring to the table um is what enables a Workforce to be able to buy a company without coming out of pocket so there's excitement first or there's doubt first and we can we talk sellers through that um and then the question is am I going to be able to get the liquidity and the fair value for my business um that that I would have gotten otherwise and sometimes that's the first question so um if you can get through all of those questions um make them feel confident that they can get fair value for their business and the liquidity that they need to retire and take care of their own families um if you can convince them that what you're bringing to the table that opportunity is real and really you know just kind of let the the excitement around the opportunity kind of go from there I mean the competitive of this model in the market when you can make sure that folks are getting paid fairly I mean I think I think folks without the model should be nervous and worried as more Capital comes into the space because it's the most compelling value proposition for an owner that that a lot of folks can imagine but if I could just add to that we haven't addressed the management team which is who you're really going to work with going forward hands down management prefers the structure because they control their own destiny when you go from a private owner to a private Equity Fund you know and three to five years are going to flip it and you don't know what that means to you is the the executive team or the Senior Management folks running the business with an ESOP you know what that outcome is going to be and you have more control over your destiny and I think that's a huge part and often these businesses the management team can really influence the seller as to which course of action to take because if they really believe in what we're suggesting they may say you know if you go that route I think I'm going to leave and if that's the key that keeps the private Equity guy buying it then there's some influence that can be had it's very interesting those Dynamics as you get into the transaction we've also found I don't know if you've experienced this yet but by the time you get deep into the transaction most of the owners have said you know I think I'll I'll roll over some of my investment or more than I thought I would because I like what you're doing and I'm very pleased with what you're going to do for my management team and my employees and you don't really see folks wanting to put more money into a private Equity deal in my experience John circling back to to your observation that there's there's a lot of appetite for this and the investors that that you organize and engage with uh but but I think you know the opportunity set is still small right we have uh you know a number of of great early adopters uh you know including those that are here today uh but I think one of the things the the alliance has been thoughtful about is using public policy as an opportunity to catalyze right new markets new investment opportunities that again marry this you know High Financial financial performance uh outcome uh and return outcome but with you know issues like Workforce and and local job creation and so forth tell us a little bit about um you know how public policy generally and then you know in particular employee ownership can really um you know catalyze the role of of private investment yeah it's an important question and I think um you know we do always think really carefully about this because our role is not to say you know the federal government should be subsidizing the investors that we work with um no it's about enabling encouraging investors to think about the way that they can achieve these positive impacts that I talked about before and fortunately we have actually a really robust track record of the federal government doing just that going back to you know the 70s if you want to between tax credit policy between the community reinvestment act bringing Banks into the mix between uh some of the more modern things like up to opportunity zones recently there are different ways that Federal Government Can shine this Spotlight on investable opportunities that really do catalyze a private Market more than anything else and I think actually the sbic program you know building off this established model makes a lot of sense for the the new legislation because we have seen that provide an opportunity for for funds like bills to go through uh you know it's it's rigorous you're talking about it and you're going through it again um to show that you know this is a solid fund that can manage uh private Capital well and so there's there's this really important Spotlight effect that the federal government can play and I think that's what we're seeing now um the senator who spoke earlier and and the others who who came really highlighting that uh employee ownership is something that should be thought about right now and I think the other thing as I was just listening to everyone else on here who does sit on the you know deal side um talk through this that's so important is that and which we certainly hear from the impact investors that we work with is you need alternative Capital structures to make some of this work like the just if you really want to have the the sort of Deep Impact that the folks we work with are seeking traditional debt traditional Equity leaves just the gaping chasm in between uh for a lot of the communities and the the businesses and the workers and the residents uh that that we're trying to benefit at the end of the day and so how the government can help to prove out these alternative models that's incredibly important we saw that again you know I go back to you know so much of the The Experience from 2020 it was critically important because we saw a real fear from the investors that we were working with they wanted you know they had Capital to deploy they wanted to put it to work in the communities that we're seeing shutdowns or sort of business disruptions payroll disruptions but they didn't want to overind debt those companies they didn't want to sort of shackle those companies they wanted to grow them over time and what they needed was an alternative approach and so this is one alternative approach and we hope that it'll continue to grow and that Spotlight effect will be really useful thank you John and we'll momentarily pause our featured program to welcome our our final member speaker and Champion for the day hey Congressman how are you no [Applause] well I actually don't my remarks are about 45 minutes so and I know you've been here probably for many many hours and I just want to say thank you um you know I come to this work from a background that's somewhat unique I grew up in a business family my great grandfather Jay Phillips used to tell me regularly said Dean money is like manure if you stack it up it stinks and if you spread it out it fertilizes and and he reminded me time and time again that business is a means to an end the end is not to aggregate as much Capital as possible rather to share as much possible with those who helped create it and I've been working hard over four and a half years here in Congress to find Common Ground between Democrats and Republicans and I'm pleased to say that I think we have you heard from my dear friend and colleague Blake Moore earlier you know that Senators Van Hollen and and Rubio are also leading this in the Senate some strange bedfellows which is actually a darn good sign that we might be on to something and I just want to thank every single one of you our panelists all of you here in the audience for prioritizing I think something that could be transformational for our country and if we can share success create an ownership economy we will have accomplished something that I think will be transformational in beautiful ways socially economically and frankly from a unification perspective which our country needs more than ever so those are my remarks I have nothing else to share other than heartfelt gratitude for what you're doing I am on this Mission with all of you I'm your friend your colleague your Ambassador and your humble servant so with that uh please call on me when I can whenever you need anything but also help us now if you can encourage our brothers and sisters on both sides of the aisle to get on board with this because if we do this together I think it'll be an extraordinary Legacy for every one of us and the communities in which we live so thank you so much I'm honored to be with you and I hope I'm the last speaker of the day thanks everybody [Applause] well thank you Congressman we really appreciate it um you know I think wrapping up here I think um why don't we go to some some q a I like Maureen's approach of of three questions in a row so Ken why don't you kick us off and then others feel free to raise your hand and Mike is on the way thanks man [Music] um starting early to do an ESOP at an early age and taking back some of the [Music] um financing from a seller standpoint and if you have banking relationships already with your line of credit and what have you um that means it's Mezzanine Financing and so that means that you can get a higher interest rate and correct me if I'm wrong 9 10 11. so there's from a from a seller's standpoint not that I did this I found this out afterwards um [Laughter] um that's an added benefit of of getting a return on your your investment and number two um if the selling shareholder stays with the company and is in an employee of the company he or she's getting the shares back free and I'm not sure if everybody really talks about those two items which if you start stacking them up into the spreadsheet and looking at private equity and looking at employee ownership it certainly could maybe tip the scales especially if share price is going up and you're getting those shares back free so I just wanted to I don't have a question I have a sorry I actually think I can frame what your question may have been which is The Debt Service of the higher interest rates on the company's balance sheet as you continue to grow my question is this Chris and and you and I forget your name John and Regina uh nothing against you two but you're in the private Equity world does have other strategies nothing bad I appreciate what you're doing not they have other strategies been evaluated to promote investment in employee ownership one thing that comes to mind is uh especially John when you were talking about it was uh the historical preferential interest rates to Banks to be investing in esops which gave a lower cost of financing we've talked a lot today at the state levels and there's been some extraordinary opportunities with State guarantees um accredited as a credit enhancement or link deposits to provide lower cost of credit as well and I would be interested in any discussions around other forms of capital enhancements to promote employee ownership I have to put this in the form it's a comment with a disguised question the cloud begin with the question is this enough uh a statistic which dick May and I have and other friends have dug up which was a little bit behind the idea of coming up with this bill is we believe that ESOP transactions are about two tenths of one percent of M A activity in the United States so so why are we doing this we've got seven thousand esops it's been flat the growth has been flat we need to do something more I think to get from two tenths of one percent to being a a real competitor a professional friendly competitor with conventional private Equity to do this kind of work so my question is is two tenths of one percent enough there we go well I'm going to just address the that we've been flat because I would argue that we we do see growth every year I mean my team looks at you know several billion dollars in transaction activity a year the reality is we have a lot of M A in this space and then we do have companies who are very successfully sub companies for a long period of time that are bought out by private equity and you know back to the comment earlier in the day there's there's not bad private equity and I think it benefits those employee participants I mean they had shares in the company and there are certain companies that that makes sense that they maybe not don't have a future they don't have a there's not a strategic that can acquire them there's not a management team and that that alternative and bringing that capital in to buy out that company could be the best alternative for that company um so I just want to make the comment because I keep hearing that we're flat we're not growing um I think there is growth there is awareness I think there's more awareness out there because I agree with you it's still you know a very small component and I think you're seeing more companies I mean I'm encouraged when I have my investment bankers come to me and say the you know the business owners want to understand the Strategic Alternatives and they want to understand the ESOP you know I had and I had one situation where our investment banker was given that that task he came and the profession management team said we really want to understand the csap and after interviewing the the family coming back they did you know the traditional Investment Banking slide showing the half Moons what it can deliver what a Candler or the ESOP always was showing that it wasn't delivering as much as the rust and as the first question that was asked was you know why is it that the ESOP is at the lowest you know is the lower in the in the pecking order of all the other Alternatives and the investment banker said well because there's definitely more learning that needs to be done and the board member said well isn't that why you're here and I just had a big smile on my face because it is I mean it it's a it's a learning curve you know we're fortunate we have a team within the bank that can help get up the learning curve but it's it's also you know many companies go through this dual track they're beginning to look at an ESOP compared to a third party sale and I'll also argue that there's not always a strategic out there that's a that's a fit for business and so and as we talked about private Equity isn't a full cache at close either and every day so I think it's Alternatives I think putting it on the spectrum of alternatives for any business owner is important and I think that's what they're looking for and truly that's why our advisor group was set up we're not a fee for service we're set up to help advise obviously the end at the end of the day after we're doing you know modeling we want to you know do the financing we'd love to invest the proceeds but we're not we're going at it with we're agnostic and business it's not for every company and we need to really understand the objectives of Company hours and they really want to understand what the options are and from those options make that decision in an unbiased way but an ESOP should absolutely be on the level Level Playing Field with all the other alternatives and out I'll respond to um to Ken's Ken's statement I won't go into the the weeds of the financing but but can you bring up a uh interesting point um one of the benefits of employee ownership of sellington ESOP or even to co-op or eot is how much control it gives the seller and how and when they exit um the transactions that we do are typically the seller wants to exit completely it's 100 buyout what we're exploring and thinking about down the line was what if you're an owner who has a company and you want to grow and you need financing to help your company grow and the traditional Capital markets have dried up or they don't understand your business model or you just can't find the capital what does it look like to sell 30 of your company to your workers get the capital needed to to jump start this next idea and partnership with your workers and with your board and then and then sell you know another 30 year later and can you you're an excellent person to talk to about this because that's that's kind of what you did with your company um but that level of flexibility is something that I think needs to be understood and talked about more and as people you should be thinking about your exit for your business over uh you know five ten or more year period what does it look like to do 30 a year five you know 30 in year seven you know 30 year 10. foreign I'll uh try to address a couple of those questions I think you're talking about getting warrants back with your notes perhaps as to you getting shares even though you were the seller of the business or through the ESOP itself right we're getting into the weeds a little bit but there are some tax benefits that when Congress created these Ops in 1974 among those if if you are a C Corp and you sell to your employees you can get what's called section 1042 deferral of your capital gains much like if you sold your home and you roll your profits into a new home you get to defer it same thing here if you choose that then you can't participate in the ESOP plan you could have warrants associated with your note but not participate in the plan if you do not choose that and you stay you could theoretically participate in the plan but but there are caps you have a 409 P testing and all that all Risa plans have that could limit the economics to you as to the rates on the notes keep in mind at least the way we're doing this we're creating a hundred percent employee-owned business they put nothing into it and themselves so we as the junior Capital providers have to get Equity like returns for the capital that we're putting into it and so the way we do that there's a small cash pay component typically it's about four percent on the note and keep in mind we're 40 to 50 percent of the capital occasionally 60 percent of the total capital so we're getting that we're getting payment in kind interest that those two combined looks something like 14 percent um that pay many kind interest is taxable to our limited partners which is a problem because we often don't get that paid until we exit so three five years down the road it would be much better for us if the taxes on that pick were not due until we got the cash because it creates a drag on the returns to our limited partners that would be huge um but it's a you know different side of Congress dealing with taxes all we're asking is that you align the cash with when the taxes are paid that's huge I think it's one of the deterrents historically to other participants coming into these structures what's unique about the sbic program and it goes back to the original intent effectively by the government through the debentures that are issued but guaranteed by the government that the sbic's are paying the interest and principle on that the the government doesn't allocate money to it it's self-funding but there is a guarantee there to help reduce the cost of those debentures effectively by having that leverage at your fund you're helping enhance the returns to your limited partners so just with small businesses that are risky where you tend to lose more money right riskier you're able to offset some of that such that your limited partners can get market like returns and therefore attract that Capital same thing goes when when we're doing these ESOP Investments because we're effectively giving 60 percent of The Upside we we effectively have a warrant for about 40 percent of the company that gets us to something like a 20 return for our Equity Capital which is not even Market because most Equity Capital want something like 25 to 35 percent that that's where the market is today but we have to work for that we have to earn that and the leverage helps us achieve better returns for the limited partners while still giving a benefit for free to the employees they're they're analyze the rub you've got to bring market-like economics to something that they traditionally have not come into and we think this bill really does that well Bill and others thank you you'll have the last word I appreciate can we have a round of applause for the panel please and I'm pleased to hand it off to Joseph who will introduce our closing speaker okay so thank you very much we're moving into the sort of reflection part of the day and let me just say we have three books out there they actually are for you to take uh uh to encourage your further reflection uh we have a Aspen Rutgers uh research summary which I'd like you to take a look at because tomorrow we're going to move more into talking about research and ideas uh as part of our first reflection I'd like to introduce the dean of the School of Management Labor Relations uh distinguished Professor Adrian Eaton uh Adrian has been a wonderful uh Advocate and supporter in developing The Institute for the study of employership for profit sharing and uh I'm delighted to hear her thoughts [Applause] I first became Dean I think it was six years ago which is hard to imagine I learned that Deans do a lot of welcomes so today I get to do something a little more fun actually than welcoming and to do a little reflection on the day I'm concerned that that may also make Joseph nervous we'll see because I'm I'm going to be a little bit off script but I am going to say a few things from my original remarks from this morning so to start I'm just really pleased that we were able to co-sponsor this event and to work so closely with Aspen and the Aspen team um it's it's just been a really great day and many people thanked Marianne Meister earlier in the day and the Meister family but and I want to add to that but I also want to say more specifically that this program is partly a result of a conversation Marianne and I had outside the aquarium at the Scripps Institute in La Jolla last year on a very lovely day and in addition to always appreciating Marion's financial support I also really deeply appreciate that what I will call A Gentle push to come to Washington and to do a program like this so again thank you so much for that um second thing I wanted to say that I would have said this morning is to say that as a state university we don't advocate for particular policy proposals and I think Aspen has that position as well um so we don't do that nevertheless I will and by the way we do as individuals we are certainly allowed to advocate for policies just not as as an institution uh given that though I'm going to say listening today I want to talk just quickly about what I heard about maybe not consensus that's probably not quite the right word but themes or areas of policy making that came up again and again and of course improving access to Capital we just heard from some of the funders and investors around that topic making transactions and conversions easier clarifying relaxing streamlining depending on who you are the rules and regulations and it was so great to hear from the panel of agency Representatives um what academics sometimes call street level bureaucrats which is not at all meant to be an insult but a very interesting area of public policy and public administration work that the actual implementation of policy as is important um as the passing of original uh laws and I think we were really hearing that today and hearing that threaded throughout the conversation and I find that quite interesting incentives of course for employee ownership and then awareness and knowledge including for service providers and bankers and then more research and of course we see our us the Institute the school as having a central role in the awareness and knowledge piece and then the research piece that we always like to hear people encouraging more research a few other things that I thought about today that just kind of stood out to me they may not have to you but I really appreciated the discussion of the broader social benefits of employee ownership and it strikes me that that's important to be thinking about in terms of the politics of policy making right so that there's a broader set of stakeholders in the communities where employee-owned companies operate and we talked about resilience adaptability uh stability you know the ability to respond in constructive ways to crises Community spillover also known by economists as positive externalities and a couple of um what seemed to me to be kind of spillovers from the impact on workers and that is companies with employee ownership that um that give some Primacy to financial literacy that has spillover benefits for communities for the workers with the financial literacy but then to the communities in which they live and operate and then one of my favorite topics of voice and influence in the workplace and researchers actually know quite a bit about or something about the spillover effects of the workers ability to have voice and influence participation in the workplace into community life and it's very important for for building active citizens or political participants so those are I think are some of them then I guess you know just at a conceptual level that imagining um bologna and Amelia Romana I really I really loved that um and and thinking maybe we ought to learn more about that Joseph at a future conference um just a couple of other things interplay between the different levels of government particularly state government and federal government so we've had a lot of emphasis we're sitting in the U.S Capitol in Washington DC but I think we've heard a lot today about experimentation at the state level and and that's so important generally but important particularly in times of federal dysfunction um and then the old saw about States as the last of democracy so I think it's important that we kind of keep in mind these different levels of of policy making and government along the way uh one other thing I guess I worry about a little bit that we're just preaching to the choir about this but I do think even if we are doing a bit of that that these events do help to create synergies new ideas new connections I met someone today who I'm doing something that I'm really interested in myself and potentially as a research project in the future just as an example and then Richard Freeman and I were were talking earlier this morning about just the hopefulness of programs like this so even those of us who've been working in this Vineyard for a long long time I think this was a very hopeful day actually and you know it can seem frustrating and maybe things are flat or no I think actually we're in a moment here as a number of people talked about and so I think we need this kind of exchange to to keep ourselves feeling hopeful and then just a last thing or maybe two last related things thank you to Joseph of course to Jack Moriarty to Bethany is she in the back there someplace oh outside and anybody else from Rutgers who who helped to make this possible and just a final comment that we're hoping this is the first in a number of forums like this going forward so we will have to discuss that further with Aspen and Joseph but I think we're not we're not done with this kind of um investigation in this place at this time all right thank you [Applause] well thank you Adrian that was um that was really helpful and I'm thrilled that you've been taking such great notes all day so um so I just have a couple of things to say before uh introducing the the last speaker for today so first of all um it's the end of today but it's not the end of the employee ownership ideas Forum we we are again tomorrow in the Aspen Institute offices which are at 2300 N Street Northwest so over at the West End of the city uh it's actually 24th and in but somehow it's 2300 N Street I don't really get that um but uh but that's what will be tomorrow breakfast is available at 8 15 and we'll begin the program at nine o'clock um and then I also want to thank a huge thanks to to my team in particular the Aspen team but to both teams really I mean this is a a lot of work putting these things on and there's a ton of things people are doing you saw them you know getting getting all these name badges done and handing them out and directing people the right way to go making sure there's food for everybody to eat I want to do a particular call out to my colleague Matt Helmer um Matt you know has been a thought partner on this throughout as well as sort of making sure all of the logistics work he's sort of the everywhere every every place everywhere all at once or whatever it is person I'm sure you've seen them you've probably met him because he's been doing everything so huge thanks to Matt um just really you know he uh when I said we should really try this and he actually trusted me and went there so I appreciate that um [Applause] and now to close out our day um it's really my great pleasure to introduce um my friend Sarah K from Prudential Financial to say a few words um Sarah is Vice President of inclusive Solutions at Prudential Financial in her current role she leads strategic philanthropy and Partnerships to help Advance the company's purpose and commitment to inclusive economic growth she oversees I have to read this because her job changes a lot she oversees philanthropic grants business aligned Partnerships and employee volunteer programs to expand work and wealth opportunities for financially vulnerable populations build inclusive and Equitable communities Advanced racial equity and Justice and support Disaster Response and Recovery experts she's been a big supporter of the Aspen Institute of the work of the economic opportunities program and just a real Delight always to work with and also a great thought partner so Sarah Sarah thank you for being here and thank you thank you so much Maureen I will keep it short because I know I'm at that close of the day um I'll say it's been such a great day just to listen to All of the great panelists we've heard from investors and funders and uh researchers and government agencies and just to see all of these people come together I think this is uh you know almost kind of years in the building to see so many people invested in this and particularly to see the bipartisan level of support a few of us were talking outside just how rare that is unfortunately in this economy today I was here yesterday participating in another Hill briefing around baby bonds and so this is all in an effort and how do we make sure that people have access to wealth building Pathways for both the short term and the long term and so for those of you who don't know Prudential Financial we are a global financial services company and we were founded 148 years ago on the principle of equity that Financial Security and the peace of mind that comes with it should be within reach for everyone and so you know we've heard a lot today about how wealth for everyday Americans is decreasing yet the racial wealth disparities are ever increasing and continue to grow even more and so at Prudential we're really focused on how do we connect people to good jobs how do we make sure that we're promoting practices and policies that are expanding wealth building opportunities and really looking at new Innovative wealth building Pathways like employee ownership we know employee ownerships keeps assets and Commerce in communities it helps maintain good jobs and really looks at how do you create vibrant local economies and making sure that we have a shared prosperity and so we hope that you will continue to Advocate and join and help us businesses whether it be small to large we're really excited because today this morning the reason why I was late we had a board meeting and we just approved so Hillary two grants to ownership works and project equity for three million dollars so we're really happy to say that that was unanimously approved and we continue to Champion all the work that you all are doing because we know this is so important to even local community but at the state and the federal level and all again in the effort to make sure that we are helping people create wealth so I thank everyone today and I look forward to seeing all of you tomorrow as well and thank you so much to Maureen and the Aspen team to Joe I also want to recognize Paula who leads our work and wealth portfolio here who's with us today as well too so thank you all and I hope you enjoy the rest of your evening everybody great job really appreciate it thank you for doing this