Liquidity for Investors? Structured Exits!

 

In steward-ownership, there are many ways for investors to access the liquidity they seek. However, because control remains with the company and not with capital – following the principle of self-determination–, investors cannot steer the company based on their individual liquidity needs. That’s why, in most cases, steward-ownership calls for a structured exit: a predefined and agreed-upon path to liquidity that respects both the integrity of the company and the needs of its investors.

As in other financing models, liquidity in steward-owned companies can come from a variety of sources: the company’s own cash flow, new investments or refinancing (equity or debt), the secondary market, or, in some cases, even an IPO—though in this case with limited or no voting rights. A sale to another steward-owned company is also a possible scenario.

One welcomed side effect of focusing on these kinds of liquidity options – especially those that don't involve an IPO or sale – is that companies tend to stay more closely aligned with their mission, their long-term vision, and the next meaningful steps in their journey. Rather than chasing rapid increases in valuation, these businesses prioritize corporate health and purpose. And in the long run, this orientation pays off: steward-owned companies show significantly higher survival rates compared to those with conventional ownership structures.

We will dive more into different paths to liquidity here.