2020 Annual Report to the Community

January 26th, 2021: VEOC Annual Report to the Community

As for everyone, 2020 was a unique year for the VEOC. We started off with a clear plan and strategy to intensify our outreach to Baby Boomer business owners, but in March the COVID-19 pandemic tossed a wrench into those (and other) plans. As business owners largely put their succession planning work on pause in the face of uncertainty, we focused significant energy on facilitating peer support among Vermont’s EO companies in Q2. By Q3, succession activity began to seriously pick up again, with a new pattern: a far greater than usual number of inquiries being driven by employees rather than owners. That trend continued to accelerate through the end of the year, and the prospects for growing the footprint of employee ownership in Vermont in 2021 look bright.

1. New employee-owned companies in 2020

Due to the crisis putting many prospective deals on pause, there were no formal conversions of companies to broad-based employee ownership in 2020. However, one partial exception is the Vermont Yoga Collective, which was the first of the post-COVID employee-initiated conversions to do a transaction. Because the selling owner set a tight timetable for the sale of the business, the group of workers formed a simple LLC partnership that purchased the business, and have set the goal of converting that structure into a formal cooperative in 2021.

2. Outreach and education 

Conference: In hopes of being able to hold an in-person event, we postponed our annual conference from its usual date in June to August 18, and ended up presenting it entirely online.  There were 173 registrations, down considerably from 2019’s record-breaking 264 registrations, but better than we’d feared.  One of the differences the shift to online made was that fewer employee-owned companies in our region sent large contingents of employees.  Despite all the limitations, most of the evaluations were very positive, with one person calling it the “best virtual conference I've been to so far.”

Seminars → Webinars: Because of the pandemic, we shifted our in-person seminars on ownership succession to webinars this year, presenting two in partnership with Let’s Grow Kids and one with the Lake Champlain Chamber.  A total of 30 people attended these events, most of them business owners.  Selling to employees is presented in our seminar as one of four common exit paths, and some owners who might not have attended a presentation that was exclusively on this topic have found themselves receptive to the idea.  For those interested in learning in greater depth about selling to employees, we offer a track at our annual conference and, in 2020, offered five webinars on that topic, attended by 30 people.  

Outreach to professionals: Those who advise business owners on their ownership succession plans need to know about employee ownership as an option.  To that end, we had ambitious plans to continue our outreach to professional firms, but these were largely put on hold because of the pandemic.  Early in the year, we gave an introductory overview of employee ownership to commercial lenders at Northfield Savings Bank and attorneys at Dinse.

3. Assistance to companies considering employee ownership

Key to the VEOC’s goal of bringing more employee ownership to Vermont is providing assistance to company owners and leaders as they explore the possibilities.  The time span from initial exploration of employee ownership to implementation is often many years.  In 2020, we had initial contact with representatives of 30 companies.  Of those, 22 remain on our list of active cases, joining 57 cases from previous years.  

4. Technical assistance

When an Employee Stock Ownership Plan (ESOP) seems to be the best possibility for a company, the VEOC researches questions that arise and makes referrals, but does not offer direct technical assistance with implementation of these highly-regulated and complex structures.  When a worker cooperative is being formed, however, we do sometimes help carry the project further.  In 2020, we provided technical assistance to three companies as they worked toward co-op conversion.  

5. Financial report (for VEOC’s fiscal year, ending September 30, 2020)

Revenue sources: Our largest source of revenue in our FY20 was a grant from the State of Vermont’s Agency of Commerce and Community Development ($69,660 or 43% of our total income of $163,598).  Sponsorships from employee-owned companies and professionals specializing in employee ownership were our second largest income source ($48,000 or 29%).  We received more grants from foundations than usual this year ($33,500 or 20%).  The remainder came from event registration fees, donations, and interest.

Expenses: Personnel costs were our largest expense ($118,098 or 73% of total expenses of $162,258).  Other major expenses were for general operations ($29,759 or 18%) and events ($10,237 or 6%). 


Board of Directors in 2020

John Durgin, King Arthur Flour – Board President
Chris Moran, PC Construction – Board Vice President
Michael Gurdon, University of Vermont – Board Secretary
Cindy Turcot, Gardener’s Supply Company – Board Treasurer
Tabitha Croscut, Devine Millimet
Jon Crystal, VEOC (retired)
John Davis, Davis & Hodgdon Associates, CPAs
Keith Flaherty, Hallam/ICS
Elias Gardner, The New School of Montpelier
Linda Rossi, Vermont SBDC
Mary Steiger, PT360