Common Trust gains $2.6M
Common Trust, a startup specializing in employee-focused succession planning for business owners, has secured $2.6 million in funding. This investment will fuel platform development and expand services to more businesses.
Crossbeam Venture Partners led the round with participation from Schmidt Futures and a group of additional unnamed investors.
Zoe Schlag and Derek Razo founded Common Trust in 2022, leveraging their shared ownership experience gained at Schmidt Futures and Purpose Foundation, respectively. Common Trust collaborates with business owners to facilitate the designing, financing, and execution of employee ownership buyouts. This empowers owners or investors to attain liquidity by transitioning ownership to their employees.
Recent statistics reveal that three out of five small businesses plan to sell their companies within the next decade. The current market includes buyers such as private equity firms and individuals working with brokers. For instance, Teamshares specializes in acquiring companies lacking succession plans.
Nonetheless, according to Schlag, these buyers can only acquire a limited portion of these businesses. Additionally, the sale may not align with the employees’ best interests or the established corporate culture.
The investment in Common Trust reflects the growing recognition of the importance of employee-focused succession planning. As businesses face the challenges of leadership transitions, ensuring a seamless handover while retaining key talent has become a critical priority.
In conclusion, Common Trust’s $2.6 million funding round will enable the company to develop its platform further and expand its services in employee-focused succession planning. By prioritizing the well-being and future of employees, Common Trust aims to revolutionize how businesses approach ownership transitions. With its unique approach and the support of investors, It is poised to revolutionize succession planning.
