Becoming the First EOT SaaS Company in the U.S.

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For Text-Em-All, planning for the future wasn’t just about financial outcomes — it was about protecting what made the company special: its people, values, and purpose, and ensuring that foundation would remain strong for the next 100 years.

As the team explored long-term succession options, they evaluated direct employee ownership and even spent months preparing to launch an ESOP. But each path raised concerns, from limiting who could participate to creating unintended cultural dynamics.

Ultimately, they partnered with Common Trust to design and implement a custom Employee Ownership Trust (EOT). In doing so, Text-Em-All became the first 100% employee-owned SaaS company in the U.S. through an EOT; proving that long-term independence and broad-based employee ownership are possible, even in an industry where acquisitions are the norm.

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The challenge: Preserving culture and independence

Brad Herrmann and Hai Nguyen started Text-Em-All with a simple idea: build a different kind of tech company — one that values people, prioritizes purpose, and stays true to shared values.

Eighteen years later, with a close-knit team of 43 and a leadership role in mass messaging software, they asked: How do we ensure that what we’ve built can last without compromising our culture and independence?

Like many founders, they discovered that early succession planning is key.

"To anybody looking at considering employee ownership or any kind of an exit from your company: starting early seems to be a really, really big part of success. All business owners, if you wait too long, you might feel rushed or forced into doing something. If you can start early, you can do some of these things very, very slowly over time." — Brad Herrmann, Co-Founder, Text-Em-All

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Exploring ownership options: ESOPs, direct sales, and more

The founders explored several business transition paths, each with their own benefits and tradeoffs:

Direct Employee Ownership

Direct Employee Ownership involves transferring shares directly to employees, fostering a strong sense of ownership and alignment with the company’s success. However, it came with key limitations:

• Capped participation at 200 shareholders
• Excluded team members on H1B visas
• Created potential tax complications for employees

Employee Stock Ownership Plan (ESOP)

ESOPs offer a tax-advantaged pathway to transfer ownership gradually while providing founder liquidity. But for Text-Em-All, the model introduced several challenges:

• Potential to create “haves and have-nots” among employees
• Required ongoing ERISA compliance and Department of Labor oversight
• Involved annual valuations, buyback obligations, and recurring administrative costs
• Tied most employee rewards to departure rather than active participation
• Provided less structural protection for long-term independence and mission

After investing significant time and resources exploring an ESOP, Text-Em-All ultimately decided it wasn’t the right fit for them.

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Discovering the EOT: Creating a custom fit with Common Trust

After connecting with Common Trust and learning about the Employee Ownership Trust, Text-Em-All knew they’d found the right ownership solution.

"One of the challenges with the other models is that they feel like they are trying to fit us into this box that we might not fit into… having a custom solution built for our particular goals and needs was really valuable." — Hai Nguyen, Co-Founder, Text-Em-All

Unlike other ownership models that felt rigid or one-size-fits-all, the EOT offered a customizable structure aligned with their values and vision:

• Financial flexibility: Enabled gradual liquidity to founders while maintaining business stability
• Inclusive profit-sharing: Ensured all employees share in the company’s success 
• Governance guardrails: Appointed trustees to protect the company’s mission and values‍
• Future adaptability: Designed to accommodate growth and evolving needs

"Our experience with Common Trust started with purpose and the why behind what we were really trying to do. Leading with 'let's start thinking about purpose and how to protect your culture and values over time'...just made a lot of sense." — Brad Herrmann, Co-Founder, Text-Em-All

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Becoming 100% employee-owned

In October 2023, Text-Em-All officially transitioned to 100% employee ownership through their EOT.

Trustees now steward the company’s mission and oversee leadership. Brad and Hai remain in critical roles, while all employees benefit from the company’s success through a robust profit-sharing program.

"We're not just introducing a new model; we are redefining success for business owners. By embracing shared ownership, we empower every team member. Our customers, employees, and their families will all reap the benefits of this change. Together, we are creating a future where everyone wins." — Brad Herrmann, Co-Founder, Text-Em-All

Curious how it’s going one year in? Brad joined Common Trust for a candid conversation about their first year as a 100% employee-owned company. Watch the webinar replay to hear what’s worked, what’s surprised them, and what’s ahead.

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A new ownership model for SaaS — and beyond

Text-Em-All’s journey to employee ownership is more than a transition; it’s a demonstration that alternative exits to SaaS acquisitions exist — preserving culture, independence, and long-term value.

"This isn't just a milestone for us, but a leap forward for every member of our team and their families. We're thrilled that this company will stay independent, private, and focused on long-term success - and that we'll share that success together." — Brad Herrmann, Co-Founder, Text-Em-All

Lessons for leaders interested in employee ownership:

• Start early: Give yourself time to explore and plan thoughtfully
• Protect what matters: Prioritize models that safeguard culture and values
• Think inclusively: Look for solutions benefiting employees, founders, and customers alike
• Avoid one-size-fits-all: Find or build a structure tailored to your goals
• Plan long-term: Consider sustainability beyond immediate financial outcomes

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Ready to explore employee ownership?

Common Trust partners with business owners to design and implement employee ownership structures that align with their values and long-term vision.

Want to learn how an Employee Ownership Trust might work for your company? Schedule a free advisory call with one of our experts today.

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