For many business owners, selling to private equity feels like the default exit—but what if it comes at the cost of your company’s culture, people, and long-term vision? In this episode, we sit down with Robert Reavis of ButcherJoseph & Co. to explore a powerful alternative: the Employee Stock Ownership Plan (ESOP). Robert shares how owners can achieve liquidity while preserving what they’ve spent a lifetime building.
We break down how ESOPs work, the tax advantages they offer, and why they’re becoming an increasingly attractive option for founders who want more than just the highest bid. If you’re thinking about exiting and want to protect your legacy while still unlocking value, this conversation will open your eyes to a smarter, more intentional path forward.
Episode Highlights Here:
Brett
Before we jump into this episode, I want to invite you to join our community to help you become a better steward scale to billions and ultimately give more or all of it away. All I want
you to do is to click the subscribe button right now. I love your support. It’s incredible to see your comments, and we’re just getting started. I can’t wait to go on this journey with you.
Thank you so much for subscribing. It means the world to me. Welcome to the build to billions podcast where we got successful entrepreneurs and investors on their journey from millions to billions. We believe the key to scaling and compounding your wealth and life starts every single day with the mindset and practice of stewardship over ownership and applying billionaire biblical principles. Our ultimate goal is to have you scale and compound your wealth and life so you can give more all of it away to help MVPs, the most vulnerable people. My name is Brett Swarts. I am your host today. Each and every episode, we are joined by the world’s best entrepreneurs, millionaires and billionaires. They share their secrets, insights and wisdom with us, so we can all scale up and make a bigger impact. I’m excited about our next guest. He’s out of the Miami area, and he specializes in M and A Exit Planning, succession planning for his clients, mostly private families, using traditional mergers and acquisition services, plus ESOP buyouts, recapitalizations and capital advisory. And he’s going to share with us, in particular, SOP, you know, strategies. And also, we’re going to we’re going to be touching on some different capital gains tax and ways to exit gains tax and ways to exit please. Welcome to the show with me, the director at butcher Joseph and Co. Mr. Robert Rivas. Robert, how’re you doing?
Robert
Doing great. Great to be with you.
Brett
Excellent for listeners. Get to know for the first time, would you give us a little more about your story and your current focus?
Robert
Yeah. So, I’ve worked with butcher Joseph now for over a decade. Our principal specialty is working with founders or closely held family businesses on succession planning, and we have a subspecialty in this interesting framework called an employee stock ownership plan or an ESOP, which I’m really excited to get the opportunity to speak with you a little bit more on today.
Brett
Excellent. Let’s dive right into that. What’s the number one? Seek? The number one secret to setting up aproper ESOP so that your employees win and you win as the owner of the company?
Robert
Number one secret, as really with all succession planning, is putting in place a lot of thought, a lot of careful analysis and a good team as early as you can, so that you know what your plan is, you know what your objectives are, and you know who you need in order to execute on your plan and putting that together early and giving your time and giving yourself enough time to think through the structure and to plan those years in advance, both pre and post. Transaction is the key to making sure that several years on transaction value is sitting where you want it to be, which ultimately is with you and with your company.
Brett
Excellent. So that makes sense. So being early and being thoughtful, being intentional, and the better more you can do. That is better. S Corp, C Corp LLC, for ESOPs is one better than the other.
Robert
Depends on what your objectives are. The way that the regulations are currently structured. If you sell stock in your business over 30% that you’ve held for more than a year to a C Corp ESOP, then you have the optionality to defer capital gains using a structure called 1042 and what 1042 does is it’s very similar to a 1031 exchange. In real estate, you’re allowed to buy qualifying replacement property, typically public us, corporate debt or public equity, and you then have the option to further leverage that, to get liquidity and to hold on to that qualifying replacement property until the resolution of your estate plan, at which point, oftentimes, errors will get a full step up In basis and allow you to ultimately defer and avoid the capital gains tax. Now I will hit, I will add very quickly that we are not tax advisors, and those are very general concepts regarding the process, but that’s kind of the overall structure and how it works. Now, if you sell to an S corp, you do not get the benefit of the 1042 referral. But if the company is100% S corp owned ESOP, then it is entirely exempt from ordinary income, business income.
Brett
So if you like this little, short clip of the interview I just did, click over here to watch the full interview, and please don’t forget to subscribe. Thanks so much, everybody.
Watch the episode here:
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About Robert Reavis
Robert Reavis is a Managing Director at ButcherJoseph & Co., where he specializes in advising privately held business owners on exit planning, liquidity strategies, and Employee Stock Ownership Plan (ESOP) transactions. With deep experience in investment banking and ownership succession, he helps founders navigate complex decisions around selling, recapitalizing, or transitioning their businesses in a tax-efficient and strategic way.
Throughout his career, Robert has worked closely with entrepreneurs to design exits that align financial outcomes with personal legacy goals—particularly for those seeking alternatives to traditional private equity sales. Known for his practical, solutions-oriented approach, he brings clarity to the often overwhelming process of business transition, helping owners protect their company culture, reward employees, and unlock long-term value.
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