ITOCHU Announces a Capital Alliance with Teamshares Supporting Small Business Succession
November 7, 2024
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Keita Ishii, President & COO; hereinafter “ITOCHU”) announced today that ITOCHU formed a capital alliance with Teamshares Inc. (headquartered in New York, USA; Michael Brown, CEO; hereinafter “Teamshares”), a start-up supporting business succession through employee ownership.
Small enterprises represent 99.7% of all businesses in Japan. However, the country faces growing challenges related to the aging population, including the risk of losing valuable jobs, technologies, and expertise as businesses close due to a lack of successors.*1 Traditionally, most businesses are taken over by relatives through a transfer of ownership. Recently, business succession involving the transfer of the business to a third party (M&A) or to employees has been drawing attention.*2 The latter is when a business owner allows an employee of the company to take over the business.
With their original employee ownership succession model, Teamshares supports a staged business succession, transitioning a business from being owned by one owner to being jointly owned by employees and Teamshares. Specifically, they acquire small businesses that are stably managed but do not have any successors, grant equity securities to their employees and help grow the business together with the employees. The lack of people willing to take over small businesses is also a serious challenge in the United States today. Since its founding in 2019, Teamshares has successfully supported the succession of over 90 companies in 42 industries. By fostering employee share ownership, Teamshares helps preserve the company’s culture while setting the stage for sustainable growth through aligned economic incentives.
Through this capital alliance, ITOCHU will support the introduction of the Teamshares employee ownership succession model in Japan, leveraging ITOCHU's domestic logistics network, to solve the succession issues that small businesses in Japan face. Following the business succession, ITOCHU will look to support digitalization to increase corporate value through Tsuji Hongo IT Consulting Co., Ltd. which supports the digitalization activities of businesses, mainly small and medium-sized businesses, and the digital business group*3 that ITOCHU has constructed. ITOCHU has invested in Tsuji Hongo IT Consulting Co., Ltd.
ITOCHU has established its The Brand-New Deal: Profit Opportunities are Shifting Downstream management policy and is developing its business areas by tracking the needs of sellers, buyers and consumers as they diversify along with the changes in society and by pioneering and transforming its businesses, beginning with its downstream operations.
ITOCHU will continue to accumulate knowledge and expertise in the area of business succession, preserve the vital power of the small businesses that Japan enjoys for future generations, while supporting the realization of a sustainable society through this business.
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*1The Small and Medium Enterprise Agency, Data de Miru Jigyo Shokei
(https://www.chusho.meti.go.jp/zaimu/shoukei/know_business_succession.html#a2 ) -
*2TEIKOKU DATABANK, LTD., Survey of Corporate Attitudes towards Business Succession (2023)
(https://www.tdb-college.com/column/up_img/1700541920-771051_p1.pdf) - *3Business portfolio to be built with an alliance partner having excellent technology, know-how, and data to give support to enterprises for DX
About Teamshares
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Company name | Teamshares Inc. |
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Representative | Michael Brown CEO |
Headquarters | 214 Sullivan Street, Suite 6B, NY, NY 10012 |
Established | June 2019 |
URL | https://www.teamshares.com/ |