4/22/26
The Challenge: A Succession Gap Facing Thousands of Colorado Businesses
Across the United States, an estimated 6 in 10 business owners plan to retire or sell their businesses within the next 10 years. Yet the numbers are sobering: only 15% of businesses are passed down to the next generation, and only 20% of listed businesses actually sell. That leaves a majority of owners without a clear path to benefit financially from decades of hard work, and leaves employees vulnerable to job loss when a business closes or is sold to an outside buyer.
Colorado is no exception. Across the state, 48% of small business owners are 55 or older, meaning thousands of businesses are approaching a pivotal transition point right now. According to the Colorado Employee Ownership Office, employee ownership models offer an alternative path to retirement that preserves jobs and creates a win-win for business owners, employees, and communities alike.
For John Shaw, founder of Shaw Solar in Durango, Colorado, that transition was personal.
The Story: 20 Years, 30 Employees, One Big Decision
Shaw Solar has been a fixture of the Durango community for two decades. What started as a solar installation company has grown to include batteries, EV chargers, and most recently, solar-powered heating and cooling. The company has seen consistent year-over-year growth, even through challenging seasons, and employs 30 people who have helped build it into what it is today.
As Shaw approached the company’s 20th anniversary, he began thinking seriously about its future—and about the people who had made it possible.
“This company has always been a team effort. Twenty years in, it felt like the right moment to make sure the people who helped build it could share in what it’s become. Transitioning to employee ownership was my way of making sure their dedication translates into a real financial stake in the future.” John Shaw, Founder, Shaw Solar
In early 2026, Shaw transitioned the company to an employee-owned worker cooperative. Fourteen senior employees, out of the company’s 30, were invited to become founding employee owners. All fourteen accepted.
The Financing Challenge: Why Employee Ownership Deals Are Hard to Finance
Employee ownership conversions, particularly worker cooperative structures, are among the most complex transactions a community lender can finance. Conventional financing alone often can’t bridge the gap between what a seller needs and what a newly formed cooperative can borrow. The capital structure has to be creative, layered, and mission-aligned.
That’s where First Southwest Bank’s CDFI designation makes a critical difference. First Southwest Bank can layer low-rate, subordinate debt alongside conventional financing, making deals viable that would otherwise fall apart.
For the Shaw Solar transaction, First Southwest Bank worked alongside the company, the state of Colorado, and a team of attorneys to structure a deal that honored the seller’s legacy, protected employee jobs, and set the cooperative up for long-term financial health.
“This is exactly the kind of economic development our communities need. Employee ownership conversions keep our most treasured businesses and jobs local – especially in rural communities.” Eric Guttormson, Sr. Lending Officer, First Southwest Bank & Member, Colorado Employee Ownership Commission
The Outcome: An Owner on Every Job
The results have been immediate and tangible. Under the new cooperative model, profits on top of base employee wages are distributed among all employee owners.
Employee owners now serve on boards and committees that shape the company’s finances, operations, and culture. And the shift has already enabled Shaw Solar to expand into new business lines—including solar-powered heating and cooling—that Shaw says wouldn’t have been possible without the employee ownership structure in place.
“When you have a stake in the outcome, you show up differently. Every job we take on now will have an employee-owner behind it, and that pride shows up in the quality of the work, and ultimately in the experience our clients have.” John Shaw, Founder, Shaw Solar
Shaw also sees the transition as a model for rural community resilience, a pathway for young workers to build wealth, stay rooted, and raise families in rural communities rather than leave for larger cities.
The Bigger Picture: Employee Ownership as Economic Development
The Colorado Employee Ownership Office, established to support businesses considering these transitions, points to a growing body of evidence that employee-owned businesses promote higher quality of life for worker-owners, including higher wages, better benefits, lower turnover, and greater job security. For business owners, the benefits are equally compelling: a more engaged workforce, a guaranteed succession plan, and a powerful tool for attracting and retaining top talent.
The office brings together attorneys, financial professionals, accounting experts, and employee-owned businesses to form a statewide network of training, support, and consulting, making it easier than ever for Colorado business owners to explore the path.
For community development financial institutions like First Southwest Bank, employee ownership conversions are a natural fit. They preserve local jobs, build household wealth in underserved communities, and create the kind of economic resilience that our rural communities need.
How First Southwest Bank Can Help
If you know a business owner considering an employee ownership transition, or if you’re a lender looking for a capital partner to help structure one, First Southwest Bank offers:
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CDFI-designated subordinate debt to fill capital gaps conventional financing can’t cover
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Experience structuring worker cooperative and employee ownership conversions in Colorado
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A mission-aligned team that understands the complexity of these deals and is committed to getting them done
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Relationships with the Colorado Employee Ownership Office and other statewide partners