A State Stipend for Exploring Employee Ownership
The Massachusetts Center for Employee Ownership may pay half of approved advisory costs for a business exploring an ESOP or worker cooperative, up to $25,000 for an ESOP. Here is what it covers, its limits and how to tell whether it fits.
Who Runs It
The Massachusetts Center for Employee Ownership (MassCEO), an office within the Massachusetts Office of Business Development. It is a competitive program.
Who It's For
Businesses operating in Massachusetts that are not majority employee-owned today and are exploring a move to an ESOP or a worker cooperative.
What It Covers
Advice before the ownership change, such as a feasibility study, transaction structuring, valuation, trustee and legal work. The work must be done by a MassCEO-approved provider and fall within the approved scope.
How Much
Half of qualifying costs, up to $25,000 for an ESOP project and $12,500 for a worker cooperative. The company pays the other half, and MassCEO pays the provider rather than the company.
How to Apply
Through an online application linked from the program page. A review team considers readiness, need, financial capacity and the benefit to workers and the community.
Timing
Applications are accepted on a rolling basis while funding lasts, and MassCEO may cancel the program at any time. An award may run for up to six months after the contract is signed.
How Old Harbor Advisors Can Help
Old Harbor Advisors is not on MassCEO's list of approved providers. We can walk through whether the program fits your situation, alongside the other paths open to you.
- Education first. We begin with an open discussion of the succession options. The advantages and disadvantages of an ESOP are discussed openly, as are those of other alternatives.
- Confidential from the start. Your initial conversation can remain general. Before you provide confidential information about your company or ownership, we execute an NDA.
- A feasibility study at no cost. If the ownership is interested in going further, we introduce a leading national ESOP advisory firm. The feasibility study is provided at no cost to the client.
- No obligation. The ESOP advisory firm and Old Harbor Advisors are compensated only upon the successful completion of the contemplated transaction. There is no obligation to proceed at any stage.
May Fit
- A Massachusetts company weighing an ESOP or worker cooperative
- Succession planning under way, with work expected within a year
- Able to fund half of the advisory costs
May Not Fit
- Another buyer or path is the likelier choice
- Early exploration that needs to stay private
- A preferred advisor who is not on MassCEO's list
Does the Stipend Fit Your Company?
Answer a few questions about the program's published eligibility. We will reply within two business days.
Questions Owners Ask About the Stipend
Does the stipend go to my company?
No. Once the company has paid its share of an approved provider's costs, MassCEO pays its matching share directly to that provider.
Can we use any advisor we choose?
The stipend applies only to work by a MassCEO-approved provider, and each business may engage one approved provider through the program. The program page lists the approved firms.
Does an award commit us to becoming employee-owned?
The guidelines describe a well-supported go or no-go decision as one possible result of the work. Awardees report each June 30 on the project, including whether a conversion was completed, and the award documents set out the obligations, so read them closely before signing.
Is there a deadline?
No fixed deadline is published. Applications are accepted on a rolling basis while funding lasts, and MassCEO may cancel the program at any time. The program's performance period runs until June 30, 2029.
Will our application be kept confidential?
Application materials are subject to the Massachusetts Public Records Law. The form asks for details such as estimated business value and recent revenue, and it asks applicants not to submit Social Security or bank account numbers.
Is Old Harbor Advisors a MassCEO-approved provider?
No. Old Harbor Advisors is not on MassCEO's list, and the stipend does not pay for our work. We can walk through whether the program fits your situation, and how it compares with the other paths open to you.