So a little over a decade ago, when my cofouners and I started Atredis Partners, I had several friends say to me “are you sure you want to call it partners?”

They told me that other founders who had done the same had regretted it, because “you know, sooner or later, everybody’s going to think they should be a partner.” I laughed and told them that I considered this a feature, and that I thought those other founders were selfish jerks. Still do.

We are by no means perfect at it, but from the outset, it was a goal of mine to build something that would outlast the founders, and the best way to do that, in my opinion, has always been to bring other folks in and treat them as well, partners.

Even before Atredis, I have always adhered to principles of transparency, horizontalism, and workplace democracy — the kind of things that lead to building loyal, dedicated teams of folks (many of whom have later ended up here at Atredis), but which also got me branded as a maverick, someone who prioritized their team over the “corporate vision” and the bottom line (damn right, I did).

That said, despite my big dreams, when we founded the company it turned out that as a tiny, bootstrapped startup, we didn’t have VC money (or, especially, VC lawyers and consultants) to make it easy to to issue shares or options. When we hired our first few employees, like many founders, I found myself promising that one day, we would figure out how to grant them a stake in the company.

In the interim, we implemented a very generous revenue sharing program (no, not profit-sharing, profit is just a big variable knob that CEOs can adjust easily by raising executive compensation), where folks got a larger share of what they bill as consultants than the house, something we still do today.

Over time, we added more and more people-centric benefits like unlimited PTO, a three month life event leave bank folks earn for every two years of service, no-cost health insurance, 401K contributions from the company that don’t require a match from employees, and more, all of which aligned with our founding principles and culture of partnership and putting our people first.

ESOPs were created by ERISA, the Employment Retirement Income Security Act, the same legislation that created the 401K and IRA. This is because an ESOP is also a retirement vehicle, a Qualified Retirment Plan per the IRS — only employees are eligible to participate in the plan, and while employees who leave can cash out the shares they’re issued, if they hold onto them until they reach retirment age, they are tax exempt in the same way that your 401K funds are.

While it comes with extensive oversight from the Department of Labor and the IRS, becoming an ESOP can save a firm millions a year in taxes, which frees up buckets of money to put back into your people and to grow. Hard to argue with that.

Reading further, I learned about SunPower and the “ESOPerative” model — creating a sort of “ESOP with Co-Op characteristics,” which fit perfectly with the way we have ran Atredis on since day one. After all that research, I was excited to get this process started, and in early 2023 I started the work behind the scenes to make it all happen by our ten year anniversary date in August of that year, reaching out to the Beyster Institute, a group at UC San Diego that advises companies through this transistion (Beyster founded SAIC, they were an ESOP! Who knew?).

Well. It wasn’t quite that easy, for a lot of reasons. For starters, one of our cofounders decided he wanted to exit the company prior to the ESOP formation. That took a lot of legal wrangling up front before we could even start on the ESOP move.

Also, because we have always been bootstrapped, I typically have (and my fellow Atredians have generally shared) a deep and abiding distrust of what I tend to call “Wall Street Math.”

When you aren’t leveraged up to your eyeballs in debt, you don’t have the luxury of being “cashflow negative,” you have to spend what you actually earn, and no more. As part of becoming an ESOP, though, you will have to work with a lot of financial wonks and lawyers, and in my experience they really don’t think it’s funny when you tell them that you share Charlie Munger’s view of EBITDA. When I was asked about our “5 year forecast” I laughed, and said we were only as good as our last client engagement, and that we never forecast more than a few months out (while this is still true on the face of it, it really bit me in the hindquarters talking to the finance wonks like that).

Ultimately, you have to play along, because part of valuing the shares that you are going to be issuing to your worker-shareholders is well, a valuation of the company, something we quite intentionally had never done before, since we had zero interest in being acquired by M&A, VC or Private Equity.

So. We learned a lot during this process. Beyster was a huge help in getting through this, can’t recommend them enough. Ultimately it took almost eighteen months, although part of that was frontloading a cofounders’ exit, which certainly complicated things.

Ultimately, on June 6, 2024, we completed the sale of Atredis Partners to Atredis Heavy Industries, a holding company that exists for the sole purpose of managing and funding the Atredis Employee Stock Ownership Plan, which issues shares to all employees using a formula based on salary and tenure, with a heavier emphasis on tenure, so that we can make good on that promise we made in our early days.

I never would have survived this process without my fellow leaders at Atredis. Kiston, Joshua, and Nathan, thank you all so much for going on this journey with me. Love and appreciate y’all very much. Justin and Tom, thank you for helping steer the ship while the entire C-suite was neck deep in this process.

I’m incredibly proud of us for pulling this off, and I’m excited about the next ten years, and proud to be a worker-owner alongside my fellow Atredians. And CEO, too, I suppose, but that’s up to the shareholders, not me. And personally, I wouldn’t have it any other way.

Onward and upward.