Two and a half years after selling his 30-year-old music business to an Employee Ownership Trust, Kudos Records’ founder, Danny, reflects on legacy, leadership, and letting go.
When Danny first began to think seriously about stepping back from the business he’d built over three decades, the landscape felt stark. “I really only had three options,” he recalls. “Sell to a competitor, wind the company up, or find something else entirely.”
Selling to a competitor didn’t sit comfortably. In the music world, as in many creative industries, competitors tend to be large and acquisitive. They want the business, but often on their terms, which can mean your brand is absorbed and your team are made redundant.
“Trade sales sound straightforward,” Danny says, “but they rarely are. It’s not usually a case of someone valuing your company, paying you, and you walk away. There are usually lots of ties.”
Closing the business was unthinkable. Many of his staff had been with him for 10, 15, and some 20 years. “I had people who’d been part of this place for half their working lives. I wanted them to be part of its future. And I wanted the company to have a future.”
The right solution
It was a very graceful solution. A good scheme that made sense immediately.
The Employee Ownership Trust model offered something the other options didn’t - continuity.
“The EOT made a lot of sense. I got a reasonable value, I preserved the company, and the people who’d built it stayed part of its future.”
The EOT itself, the idea of passing the company into collective stewardship rather than external control, felt right.
“It was a very graceful solution. A good scheme that made sense immediately.”
Once Danny understood how an EOT worked, the logic felt natural. The bigger surprise came when he looked for advisers. “Some companies were charging huge fees,” he says. “They were basing their pricing on trade-sale commission models. It felt like trying to fit a modern structure into an old framework.”
Working with Go EO, he says, cut through the confusion.
“Go EO demystified the whole process for us,” he says. “Suddenly it felt clear, understandable, and fairly priced.”
Announcing the news to the team
His conversations with his co-director and later the team followed a similar pattern, first curiosity, then caution, and finally clarity.
“The usual questions came up,” he says. “Do I own shares? Do I pay for them? What happens when you leave? It took a while for people to get their heads around it.”
To support them, the company held a large all-staff meeting and produced an FAQ that spelled out every likely question. But the real turning point was transparency.
“Once people saw how the valuation worked and how the repayment plan would operate, it all started to make sense. Now they’re all very much on board, especially the management team.”
The company grows up
The most surprising part for Danny is the cultural shift that has occurred since the sale. For 30 years, the company revolved around Danny’s decisions. He was the founder, the owner, the managing director, the problem-solver.
“People brought me a problem and I made a decision,” he says. “That was the model.”
Eighteen months later, the company looks very different. With guidance from independent trustee and governance specialist Kate Mercer, the team rebuilt its structure from the inside out. From roles and responsibilities to accountabilities and leadership approach, the new mindset reflects the collective ownership model.
It hasn’t been fast. Nor has it been effortless. “We’re a far more meeting-heavy company than we used to be,” he says. “Collaboration takes time.”
But the trade-off is worth it. Decisions now involve the people who will carry them forward, not just the founder who once carried everything.
The unexpected discoveries
The team know the company’s priorities.
The transition revealed some interesting surprises about his team. For one, Danny learned how few people actually want to lead.
He also discovered that letting go isn’t the wrench some founders fear. There have been no major clashes, no moments where his instinct diverged dramatically from the team’s choices.
“I think that’s because they all grew up in our culture,” he says. “The team know the company’s priorities.”
Danny committed to five years when the EOT was established; they’re now halfway through. He plans to recruit a new managing director in the coming months.
“In two and a half years I won’t be running the show anymore. Someone else will. And that’s exactly how it should be.”
Words of advice
Danny’s advice to other founders considering an EOT is to be realistic and human.
“Not every company is suited to it,” he says. “We had strong retained earnings, so not all of the price depended on future profits. But the real thing is not getting hung up on the top-line value.”
Founders should think instead about what they actually need for the rest of their life, and what’s sustainable for the team that will carry the business forward.
“Don’t get obsessed with the highest valuation. Think about how much is enough for you. And remember you need a motivated team and they’re only going to be motivated if they can see their financial independence point and believe they can get there.”
For Danny, that motivation is now palpable. The team think collectively, act collaboratively and feel responsible in ways that weren’t possible under a single-owner model.
Final reflections
The end result is something I’m very happy with.
Thinking back on the process, Danny is glad he had support that made sense to him.
“The end result is something I’m very happy with.”
Thirty months on, the company Danny built is no longer “his” in the traditional sense, but it’s collaborative, transparent, and built on long-term stewardship.
“We’re more grown up now. More collaborative. More sustainable. And the business has a future that isn’t dependent on me.”