Are employees of ETA-owned companies typically offered equity in the business?

Key employees at lower-middle-market companies are often pleasantly surprised to be included in the equity pool when the business is acquired by an Entrepreneurship-Through-Acquisition (ETA) private equity firm, says Anthony Walker, a Managing Partner at Next Coast Legacy.

Because alignment between investors, management and key employees is a central tenet of the ETA strategy, ETA firms often include an employee option pool in the searcher acquisition vehicle, giving the new CEO the opportunity to grant options and allow key team members to potentially benefit financially from the outcome of the investment. "It's an opportunity for these employees to understand the value of equity," notes Walker. "Key employees are quite happy, when we do exit a business, at the check that they receive as a result of their hard work."

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