425: Teamshares CEO on SPAC Deal, Growth, Employee Ownership

Teamshares CEO Michael Brown discusses the company's public listing via Live Oak Acquisition Corp. V, its strong financial performance, and unique employee ownership model.

Summary

• Teamshares Inc. is going public through a Business Combination Agreement with Live Oak Acquisition Corp. V, a Cayman Islands exempted company.
• As of the end of 2025, Teamshares owned 90 companies, with total operating profit (trailing 12 months) of approximately $60 million and total revenue of about $450 million.
• The company's model focuses on acquiring small businesses from aging owners, converting them to employee ownership, and holding them for the long term, contrasting with traditional private equity models.
• 2025 was a record year for Teamshares, with $25 million of new EBITDA acquired from new companies and existing companies achieving mid-teens organic profit growth.
• Teamshares reports a remarkably low business failure rate of approximately 1.5% per year for its acquired companies.
• The company emphasizes retaining key employees, with about 90% retention, and providing them with restricted stock grants (10% over four years) and a path to majority employee ownership over decades.
• Teamshares Inc. (the parent company) has about 85 employees, while its subsidiaries collectively employ over 2,000 people.
• The decision to go public is strategic, aimed at gaining greater access to capital to expand its mission of helping more companies transition to employee ownership.

Sentiment

Score: 8

Explanation: The filing conveys a strong positive sentiment regarding Teamshares' business model, financial performance, and strategic direction, particularly its growth in 2025 and the benefits of going public. While acknowledging past challenges and inherent risks of a SPAC transaction, the overall tone is confident and forward-looking, emphasizing a proven, differentiated approach.

Positives

• Strong financial performance with $450 million in revenue and $60 million in operating profit across 90 companies as of end of 2025.
• Record year in 2025 for acquisitions, adding $25 million in new EBITDA, and existing companies achieved mid-teens organic profit growth.
• Remarkably low business failure rate of approximately 1.5% per year, demonstrating effective operational management and selection criteria.
• High retention rate of approximately 90% for key employees in acquired businesses, indicating successful integration and motivation through employee ownership.
• Differentiated business model focused on long-term holding and employee ownership, which is presented as superior for both shareholders and employees compared to short-term private equity flips.
• Going public provides significantly greater access to capital, enabling further expansion of the company's acquisition strategy and social mission.
• Commitment to multi-stakeholder capitalism and positive-sum thinking, aligning shareholder value with employee well-being and business durability.
• Successful implementation of AI at the Teamshares level for automating tasks and analysis, with ongoing testing for implementation at subsidiary companies to improve efficiency.

Negatives

• Early acquisitions included some businesses that were too small or in specific industries (contracting, small restaurants) which experienced higher key person transition risk and led to early failures.
• Initial challenges in hiring generalists for management roles, leading to a realization that industry-specific experience is crucial for successful leadership in acquired businesses.
• A segment of employees (approximately the bottom third) may not fully value or engage with the employee ownership model, particularly short-term or seasonal workers.
• Employee ownership is not a retirement plan and does not protect employees' stock value against the failure of the business, with the company not carrying a liability for the stock program.

Risks

• The occurrence of any event, change, or other circumstances that could give rise to the termination of the Merger Agreement with respect to the Business Combination.
• The outcome of any legal proceedings that may be instituted against the parties following the announcement of the Business Combination and definitive agreements with respect thereto.
• The inability to complete the Business Combination, including due to failure to obtain approval of the shareholders of Teamshares and Live Oak or other conditions to Closing.
• The inability to obtain or maintain the listing of the public company's shares on Nasdaq or another national securities exchange following the Business Combination.
• The ability of Live Oak to remain current with its SEC filings.
• The risk that the Business Combination disrupts current plans and operations as a result of the announcement and consummation of the Business Combination.
• The ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of Live Oak and Teamshares after the Closing to grow and manage growth profitably and retain its key employees.
• Costs related to the Business Combination.
• Changes in applicable laws or regulations.
• The inability of Teamshares to implement business plans, forecasts, and other expectations after the completion of the Business Combination.
• The risk that additional financing in connection with the Business Combination, or additional capital needed following the Business Combination to support Teamshares' business or operations, may not be raised on favorable terms or at all.
• The evolution of the markets in which Teamshares competes.
• The ability of Teamshares to implement its strategic initiatives and continue to innovate its existing products and services.
• The level of redemptions of Live Oak's public shareholders.
• Other risks and uncertainties included in documents filed or to be filed with the SEC by Live Oak and/or Teamshares.
• There may be additional risks that neither Live Oak nor Teamshares presently knows, or that Live Oak and/or Teamshares currently believe are immaterial, that could cause actual results to differ from those contained in the forward-looking statements.

Future Outlook

Teamshares plans to leverage its public listing to gain greater access to capital, enabling it to expand its model and acquire more companies, thereby scaling its mission of spreading employee ownership. The company intends to continue innovating its operational model, including further integration of AI to enhance efficiency and allow for scaling with fewer people, while maintaining its commitment to not cutting jobs. The long-term vision is to build a large and enduring public company that provides superior returns through a multi-stakeholder, permanent ownership approach.

Management Comments

• "It's been the plan from day one to go public."
• "Public companies have much greater access to capital than private companies do."
• "We just actually don't think that private equity is a good way to invest... the returns are just not very good."
• "We believe in multi-stakeholder capitalism. We believe in positive sum thinking."
• "Industry experience is really what you want [in management]."
• "Running a small business, it's a gritty job, and it's not a strategy job."
• "Our failure rate is something like 1.5% per year."
• "2025 was a really good year. It was a record year both in terms of acquisitions... and... the profits of... existing companies grew sort of organically... mid-teens."
• "AI is gonna take all the cost out of running a small business. Well, anyone who's ever made human contact with a small business knows that, they're hundred percent owner s corps run by incredibly frugal people... there's no cost to take out."
• "We do not come in to cut people. We come in to buy the business the way it's, and, you know, try and help it continue to evolve and strengthen."
• "Our model is superior both for... employees and for shareholders."
• "We will not sell your business for a profit."

Industry Context

Teamshares operates as a contrarian model within the small business acquisition landscape, directly challenging the traditional private equity approach of buying and flipping businesses within a 5-7 year timeframe. Its long-term holding company structure, coupled with employee ownership, positions it distinctly against typical LBO models. The company's CEO also addresses the 'searcher model' (MBAs acquiring and running blue-collar businesses), emphasizing the critical role of industry experience and execution over pure strategic knowledge in small business management. The discussion also touches on the broader macro-economic uncertainty of 2025, noting its impact on financing and capital spending for small businesses, and offers a nuanced perspective on AI's role, arguing against the maximalist view that it will eliminate all costs in already lean small businesses, instead focusing on its potential for scaling efficiency.

Comparison to Industry Standards

• Teamshares' long-term holding company model is compared favorably to established public companies like Berkshire Hathaway, Constellation Software, Roper, and Lifco (Europe), which are cited as examples of models providing greater shareholder returns than typical private equity investments.
• The company directly contrasts its strategy with the private equity model, asserting that PE returns are 'not very good' and that the practice of buying and selling businesses multiple times is unhealthy for companies and often involves cost-cutting through layoffs.
• Teamshares differentiates itself from the 'search fund' model, which typically involves a single leveraged buyout (LBO) with a goal to sell the company within three to five years, by committing to permanent ownership and employee equity.
• The company's low failure rate of ~1.5% per year is presented as remarkably low compared to general statistics around starting or acquiring businesses, suggesting a superior selection and operational model.

Corporate Governance

Legal Proceedings

• The filing mentions the risk of legal proceedings that may be instituted against the parties following the announcement and consummation of the Business Combination, but no current proceedings are detailed.

Stakeholder Impact

• **Shareholders (Live Oak Acquisition Corp. V)**: Will vote on the Business Combination and receive important information via proxy statement/prospectus. Their investment will convert into shares of the combined public company, with potential for long-term value creation based on Teamshares' growth model. There is a risk related to the level of redemptions of Live Oak's public shareholders.
• **Venture Capital Investors (Teamshares)**: Early-stage investors will see their private company investment transition to a public market, allowing them to pass shares to their investors or sell them, marking a return on their investment.
• **Employees (Acquired Businesses)**: Benefit from job retention, no cuts in pay or benefits, and the opportunity to earn restricted stock (10% over four years, with a path to majority ownership over decades). They participate in profit performance through dividends and are not exposed to personal financial risk if the business fails.
• **Employees (Teamshares Inc. Parent Company)**: All employees at the parent company have stock options in Teamshares Inc.
• **Aging Business Owners (Sellers)**: Provided a clear exit strategy to sell their businesses and retire within 3-6 months (or up to a year), without the need for a prolonged transition. They receive a promise that their business will not be sold for profit by Teamshares.
• **Customers & Suppliers**: Likely benefit from the stability and long-term focus of Teamshares' ownership model, which prioritizes durability and strengthening businesses rather than short-term financial engineering.

Next Steps

• Live Oak and Teamshares intend to file a Registration Statement with the SEC, which will include a proxy statement to Live Oak shareholders and a prospectus for the registration of Live Oak's securities.
• After the Registration Statement is declared effective by the SEC, the definitive proxy statement/prospectus and other relevant documents will be mailed to Live Oak shareholders for voting on the Business Combination.
• Teamshares plans to continue building the company and scaling its mission of expanding employee ownership.
• The company will continue to implement strategic initiatives and innovate its existing products and services, including further integration of AI.

Key Dates

Recommendation

Teamshares presents a compelling 'strong buy' opportunity for long-term investors. The company demonstrates robust financial performance with $450 million in revenue and $60 million in operating profit, coupled with impressive organic growth and a remarkably low business failure rate of 1.5%. Its contrarian, multi-stakeholder model, which prioritizes permanent ownership and employee equity, offers a differentiated and potentially more sustainable path to value creation compared to traditional private equity. The strategic move to go public via a SPAC is a calculated step to unlock significant capital access, fueling further expansion of its proven acquisition model. While SPAC transactions carry inherent risks, Teamshares' strong operational track record, clear mission, and management's long-term vision position it favorably for substantial growth and shareholder returns.

Keywords

Teamshares, Live Oak Acquisition Corp. V, SPAC, Business Combination, Employee Ownership, Small Business Acquisition, Holding Company, Financial Performance, Corporate Governance, SEC Filing, Growth Strategy, Capital Access