🧭 Thinking Beyond the Sale: Why Employee Ownership Might Be Your Smartest Exit Strategy

For many founders of medium-sized UK software businesses, the question of “what next?” looms large. After years of building a profitable, mission-critical product, the natural instinct is to explore a sale—perhaps to a strategic acquirer or private equity. But there’s another path that’s gaining traction: transitioning to an Employee Owned Enterprise (EOE).

💡 What Is Employee Ownership?

An EOE is a business structure where employees collectively own a significant stake in the company, often via an Employee Ownership Trust (EOT). It’s not just a feel-good move—it’s a strategic decision that can preserve your legacy, reward your team, and ensure long-term business continuity.

🔍 Why Consider Employee Ownership?

Here are five compelling reasons founders are choosing EOEs over traditional exits:

• Legacy Preservation: Your company culture, values, and mission stay intact—no risk of being absorbed and diluted by a larger corporate entity.

• Staff Loyalty & Morale: Ownership boosts engagement, retention, and productivity. Employees feel invested in the company’s success.

• Tax Efficiency: Selling to an EOT can be capital gains tax-free for the founder under current UK legislation.

• Continuity for Clients: Clients benefit from a seamless transition, with no disruption to service or leadership.

• Long-Term Growth: EOEs often outperform their peers in resilience and innovation, thanks to empowered teams.

🧵 Case Study: Software Firm in Cornwall Goes Employee-Owned

A recent example from Business Live highlights the journey of bluQube Accounting Software, a tech firm that recently transitioned to employee ownership. The founder, keen to maintain the company’s community-driven ethos and support local talent, opted for an EOT structure.

The move was met with enthusiasm from staff, many of whom had been with the company since its early days. The founder retained a role in governance, ensuring continuity while empowering the next generation of leaders. The result? A more motivated team, a stronger local reputation, and a business model aligned with long-term purpose.

🧭 Is It Right for You?

EOEs aren’t for everyone. If your business is highly dependent on founder-led sales or you’re seeking a rapid financial exit, a trade sale might be more appropriate. But if you’re looking to:

• Exit gradually

• Reward your team

• Protect your company’s values

• Avoid the disruption of external ownership

…then employee ownership deserves serious consideration.

✍️ Final Thought

Selling your software business doesn’t have to mean handing it over to strangers. With an EOE, you can turn your exit into a legacy—one that empowers your team, protects your culture, and keeps your mission alive.

If you’re a UK software founder exploring exit options, feel free to get in touch with me on sean@positiveatwork.co.uk