The chief executive officer (CEO) of a family business is considering options available to owners of the business to monetize their shareholdings. Since the shares in privately-owned firms are illiquid, the family members may have significant wealth on paper, but they do not have large amounts of cash available. The second generation looking at retiring would like to realize some of the value from the firm they have worked to build and, at the same time, coordinate that planning with the best interest and intent of the other, younger shareholders. The owners need to consider not only the alternatives available to monetize illiquid shareholdings for investors in private firms, but also how to value illiquid shares based on the CEO's recommendations. The challenge facing the CEO, however, is reconciling the conflicting business ramifications involved in the process without compromising the company's strategic vision and the interests of family members.

The chief executive officer (CEO) of a family business is considering options available to owners of the business to monetize their shareholdings. Since the shares in privately-owned firms are illiquid, the family members may have significant wealth on paper, but they do not have large amounts of cash available. The second generation looking at retiring would like to realize some of the value from the firm they have worked to build and, at the same time, coordinate that planning with the best interest and intent of the other, younger shareholders. The owners need to consider not only the alternatives available to monetize illiquid shareholdings for investors in private firms, but also how to value illiquid shares based on the CEO’s recommendations. The challenge facing the CEO, however, is reconciling the conflicting business ramifications involved in the process without compromising the company’s strategic vision and the interests of family members.

Should a fast-growing, employee-owned solar electric company accept a buyout offer from a private equity investor? Could it do so without sacrificing its distinctive, high-involvement culture? Namaste Solar, a 55-person firm based in Boulder, Colorado, designed and installed solar electric systems for residential, commercial, non-profit and government customers. In 2008, the company had been growing at breakneck speed for the past four years, since government incentives for the purchase of renewable energy had created a market for solar electric systems in Colorado. Now, two investors had approached the firm with serious buyout offers. A buyout would bring a new infusion of capital to the firm, enabling it to expand more quickly and install more solar systems, and employees with vested shares would benefit from an attractive sales price. However, Namaste, from the outset, had been committed to building a democratic, high-involvement culture. Ownership was widely shared, and all employees, whether or not they held equity, were encouraged to participate in strategic decisions facing the firm. Many were concerned that selling the company would mean sacrificing the firm's carefully crafted culture. What was the best way forward for Blake Jones and the green energy company that he and two partners had founded?

Should a fast-growing, employee-owned solar electric company accept a buyout offer from a private equity investor? Could it do so without sacrificing its distinctive, high-involvement culture? Namasté Solar, a 55-person firm based in Boulder, Colorado, designed and installed solar electric systems for residential, commercial, non-profit and government customers. In 2008, the company had been growing at breakneck speed for the past four years, since government incentives for the purchase of renewable energy had created a market for solar electric systems in Colorado. Now, two investors had approached the firm with serious buyout offers. A buyout would bring a new infusion of capital to the firm, enabling it to expand more quickly and install more solar systems, and employees with vested shares would benefit from an attractive sales price. However, Namasté, from the outset, had been committed to building a democratic, high-involvement culture. Ownership was widely shared, and all employees, whether or not they held equity, were encouraged to participate in strategic decisions facing the firm. Many were concerned that selling the company would mean sacrificing the firm's carefully crafted culture. What was the best way forward for Blake Jones and the green energy company that he and two partners had founded?

Could a small, employee-owned company meet its ambitious growth goals without compromising its high-involvement culture? LightWorks Optics, based in Orange County, California, made highly sophisticated optical components for defense aeronautics, space exploration, and commercial applications. Early in its history, LightWorks had set up an employee stock ownership plan, or ESOP, under which employees gradually built up equity in the closely held firm. In 2007, the three founders indicated that they hoped to sell their shares to the ESOP trust in a leveraged buyout in 2012. In order for that to happen, the company needed to improve its revenue and profitability significantly; that, in turn, would require that it bring in more contracts, especially ones requiring high-volume production. But, LightWorks had to pay attention to its core capabilities and what it could, and could not, do effectively. Moreover, the company prided itself on its culture of ownership-one in which all employees had a stake in the business and a voice in its decisions. Could the president, Dan Barber, and his top management team reach a consensus on how to expand production without losing the benefits of a culture of ownership?