Study Overview
Over the next two decades, millions of small business owners will face retirement, yet the majority are unprepared–only one-third have an exit plan in place. While numerous buyers are available for many small business owners, selling to employees offers an opportunity to ensure continuity while (usually) enjoying tax advantages. However, despite its benefits, most business owners are unaware of employee ownership as a viable exit strategy. Even for those interested, determining whether an employee ownership conversion is the right fit for their business can be complex and uncertain. Employee ownership conversions require specialized expertise that most business lawyers, lenders, and advisors do not have. This report describes a chatbot designed to help business owners learn if worker ownership might be a good fit for their business.
Study Results
We find that AI chatbots can be a useful tool to advance worker ownership. First, it lowers the barriers for potential sellers to learn about selling to employees. Second, it automates the initial steps of the conversion process for those who advise on worker ownership, freeing up their time for deals likely to go through. We conclude by discussing the implications of this finding and suggestions for future research and chatbot development. While this version focuses only on selling to worker-owners, a natural extension can help any business owner identify plausible buyers such as family members, current managers, and outsiders.
Intervention: Employee ownership models
Research Partner: Institute for the Study of Employee Ownership and Profit Sharing
Populations: Low-wage workers
Working Paper: Foley, William and Drew McArthur. 2025. Article 9: Examining the Feasibility of a Worker-Ownership Conversion AI Chatbot
IBSI Funding Acknowledgement: Ownership Initiative
News & media
The Promote Ownership by Workers for Economic Recovery Act (AB 2849) Panel
June 13, 2023
The Promote Ownership by Workers for Economic Recovery Act (AB 2849), codified in Labor Code sections 10000-10010) establishes a panel to study the creation of an Association of Cooperative Labor Contractors, among other potential activities, to facilitate the growth of democratically-run high-road cooperative labor contractors.