A Unique Way To Sell A Company To It's Employees

Show Notes

Tulips & Company, a corporate film agency, was founded in 2002 by Laure Cousin and Charles Drouin. They started the business in the attic of Laure's house with a focus on creative storytelling. Over the years, they grew the company and gained recognition through awards. In 2018, they decided to sell the company to its employees in a unique way. They created a new company called Ortus, owned by the employees, which gradually buys shares in Tulips using profits from the company. This allows the employees to become shareholders without taking on debt. The transfer of ownership will be complete in 10 years, with the employees owning 65% of the company.

• Tulips & Company was founded in 2002 as a corporate film agency with a focus on creative storytelling.
• The founders, Laure Cousin and Charles Drouin, decided to sell the company to its employees in a unique way.
• They created a new company called Ortus, owned by the employees, which gradually buys shares in Tulips using profits from the company.
• The transfer of ownership will be complete in 10 years, with the employees owning 65% of the company.

Creators and Guests

Host

Barnaby Cook

What is The Exit Plan: Mergers and Acquisitions for Creative Entrepreneurs?

The Exit Plan is for business owners that are interested in learning more about how to sell their business. Each episode Barnaby Cook interviews someone who has bought or sold a business - either a creative agency, or a production company. The conversation gets under the skin of why they wanted to sell, or were looking to acquire, how the deal was structured, how they agreed upon a valuation and what lessons they learnt along the way.

Excellent.

So welcome both of you to the podcast.

It would be great if you could start by
just introducing yourselves and telling me

little bit about Tulips and the history of
the company.

Well, hello.

I'm Laure Cousin.

I live in Paris and I've launched Tulip &
Company with Charles in 2002 and it's

corporate film agency.

Right.

And Charles, did you join from the
beginning or when did you come on board?

exactly.

So we've launched our creative agency,
Toulipes and Company, in 2002.

And at the beginning, we were three
shareholders.

Laurent, Laure's husband, who never worked
within Toulipes on a daily basis, but who

plays the role of business coach for us.

Not each month, but I think every two
months or something like that.

It depends on issues for Trulis, but we
can ask for him on different issues and

then talk with him.

It's very helpful for us.

And what were you both doing?

just before you set it up, what were you
working as and what gave you the idea to

start the company?

Well, I had been working for 10 years in
the same business in different companies

and the last company where I was working
was producing corporate films and also

films for association.

And I had met Charles two years before and
he was very young.

He was...

He was 23 when we met and we worked
together but he was a freelance for

working for our company.

And well you worked on different projects
as a director for one and also assistant

director

on others and you helped me also for
commercial, well for trying to to trying

to find new new clients and well we very
quickly felt that we had the same will of

of launching a company and and fortunately
it was the same

a company that we wanted to create.

And how did you go about growing the
business and kind of what were some of the

key clients that you picked up along the

In fact, we started in the attic of
Laura's house.

So we were only together on the idea, on
two ideas at the beginning.

The first one was to be creative, to have
different ways of telling stories.

And the first year,

We made three films, one with some papers
that we cut in order to organize a movie.

It was in motion.

And the second one with interviews, but
very, very clever, very different.

And the last one was something very cool,
too.

And we won.

two awards at the end of this first year.

and it was finally it was important for us
to be recognized by customers on these

festivals and it was very helpful for to
follow and to grow up our business after

that.

And at the beginning, well, we had no
reference.

And so our way of trying to find new
clients, well, clients, was to look to

their website and try to understand what
were their main issues.

And we wrote them.

Well, we...

if you need to hire new people, if you
need to work on your image, if you need to

etc.

we would like to create a film that would
be...

we just exposed the films we imagined for
them and we proposed five, six, ten ideas

of films.

and we just described the concepts and
usually they appreciated because we had

already worked on their issues and we
proposed interesting concepts.

And the first client we had was La Poste,
so the French post office.

Post, how do you say that?

Post office, yes.

And so it was a quite huge client for the
first client.

And well, today we are still working for
La Poste and we never stopped.

So one other key that was at the beginning
of the company was to Fideliser.

to stay with and to retain.

retain, yes, the first key was to retain
clients and trying, after making one, they

have to have the desire to create another
one with us and and well we we've done it

quite well.

Yeah.

And tell me a little bit about what were
your sort of family situations when you

started and how did that kind of develop?

Cause I know this is going to lead on to
our conversation about what the decisions

that you made when it, when it came to
kind of selling the company.

But yeah, can you tell me a bit about
your, each of your family situation?

Charles, well, in fact...

I can start.

In fact, I was just married in 2000.

And so we have launched Tulips two years
after.

So we were together with my wife and
without any children at this time.

And we had our first son in 2004.

So two years after the beginning of
Tulips.

and in fact in fact in fact it's my sister
-in -law who spoke with Charles at his

wedding and she she understood that he had
studied in cinema and she felt that we

could get along well

and and so yes and the day after charles
wedding she phoned me and say and said

well i've met the the son of of one of my
best friends you should meet him he's

going to look for job and i think you
could you could do something together

And so I obeyed to my sister -in -law and
it was a good idea.

And you had only one daughter, Laura.

Yes, yes, I am 10 years older than
Charles, so I was 33 at that time, and I

had only one daughter, and my husband was
already working in a big company where he

is still now, and he had already occupied
different positions.

as finance director and communication
director and marketing director.

So he had already a large experience in a
large company and that has been really

precious for us several times in our
history.

Okay.

And so fast forward to today.

I know that you've got 18 full -time
employees.

Can you give me a sense of the size of the
business?

What kind of turnover are you doing?

So yes, today we have a permanent team of
18 people and of course we have many

freelances.

So it depends on each month, but it's
between 80 people and 200 people each

month.

And we produce something around 700 films
each year.

and our turnover is around 8 and 9 million
euros each year.

So we produce mainly corporate films, but
also many films for museums.

And the genre is different, so we can
produce fiction, documentaries,

3D animation, VR experiences, or AR
experiences.

So it depends on each topic and customer.

And in the 18 team workers, we have seven
producers, seven production managers, one

post production director, and three
administrative employees.

that's interesting.

So you've just got production people and
on, on staff, and then all of the

filmmakers are freelance.

Yes, yes, and that was a choice at the
beginning, and we never changed that.

It's really something that constitutes our
DNA, and that was because we wanted to be

creative, and so we wanted to have the
freedom of choosing the director for the

film, and we felt the freedom would be
bigger

we could choose directors that would be
outside the company.

So tell me a bit about how you came to
start to think about selling the company

or passing on the ownership into new
hands.

When did you first start talking about

I would say three or four years ago.

Perhaps more, more, even more.

No, no, six, five or six years ago.

Five or six years ago.

Before that, we sometimes joked, sorry, we
sometimes joked saying, well, because

Charles now has four children and I have
three.

And...

we were saying, they have to know each
other because one day perhaps they will

have to run the company.

And it was funny to think of them running
the company because they were just young,

very young.

But it felt a bit strange and kind of
unfair to think that our children would...

be the the boss of Tulip & Company in the
future.

And one day we were gathered with my
husband and also, no perhaps only, we were

three, yes we were three gathered, three
shareholders, and we thought is it really

fair to to think that our children will be
Tulip & Company shareholders?

Is it really a nice gift for them?

Perhaps they want to do something else,
and perhaps it's too heavy for them to

have this obligation to take over the
company when they're grown up?

And is it fair for our colleagues?

Today, the...

the shareholders are the boss of the
company.

And it seems more natural that in our
business, it seems natural that

shareholders and bosses are the same.

And yeah, and just to add something, at
the same time, we were close to one of our

colleagues, who is Camille, the clerk, and
she was interested by becoming a

shareholder of Tulips.

And for us, was an opportunity at the same
time, because

we had trust with her together and she was
younger than us and there is something

very good on that way and then we had a
big discussion together with Laure and

Laurent just to imagine what we want
together.

And in 2018, we have decided to welcome
Camille as a shareholder.

And we said at this time that Tulips and
Company has to be owned by...

by future directors of Tulips.

And I think it was key because we start
like that and in our mind, the goal is to

find these directors within Tulips.

And the first one was Camille.

but after saying that, it wasn't easy to
find the solution to, well, find a way of

selling tulips and company without forcing
the people chosen to be shareholders to

borrow money to the bank because one of
our core values is also freedom and

freedom that means no no debts yes

financial pressure.

We've never had debts and we didn't want
to force our successors to borrow money to

buy shares.

And that wasn't easy to imagine the way to
the dispositive.

Yeah.

So how did you go about doing the research
into the different ways that you could

sell the company to its employees?

Just to begin, before that, in fact, there
is also a question of age for law, I

think, and for me, just to be...

Because we launched Tulips together, but
we know that in few years, in four, five,

six years, I don't know, and we will see,
that's perfect like

we have to welcome new shareholders.

And it was important for us for the future
of tulips.

Well, I'm sorry.

Yes, our position is not exactly the same
as I told you.

I'm 10 years older than Charles.

So for me, it's more an exit plan than for
Charles.

For me, it's, well, in fact, well, I don't
know.

what will be the age of retirement in
France because it's a big issue in our

country at the moment.

But I'm 57, so in seven years maximum, I
will retire.

And so we felt we had to solve this
problem before facing it.

It's not in five years that we have to
find a solution.

We knew that we had to find solutions
earlier.

And for Charles, it's different.

It's more...

Yes.

It's not an exit plan.

And I think it's more an existing plan, in
fact.

But for three main reasons, this is a big
opportunity at the same time for me.

Because in a small company and in our past
pandemic new world,

it's sometimes difficult to retain people.

And of course, it's an opportunity to
retain people.

And it's also an opportunity to involve
people in our small company without big

evolutions, but with a big adventure at
the end.

And...

And in fact, our purpose is to produce
creative and meaningful media to build a

more human and sustainable world.

And we do that by developing a new
business model where people are committed

in their own company.

I think it's important to feel that.

And that's exactly what we felt during
these two days.

last week during our seminar.

So how much, because I know that both of
you are quite kind of passionate about

sustainability and looking after people
and doing the right thing by your

employees.

So how much did that kind of guide your
decision making when it came to this?

Yeah, it's totally connected to our CSR
approach.

And it was very funny because it was a
labelization for Tulips just before we

announced to our people what we had in
mind.

during this audit,

with an inspector.

It was interesting to talk with him and to
understand that what we imagine for

Trilips and for people to become
shareholders, it was exactly in line with

our CSR approach.

It's also a question of governance, of
course.

and of participation.

We want to share what we do and we want to
share the direction of tulips with our

people.

So in practical terms, how did you go
about doing this?

As we said earlier, we didn't want our
colleagues to borrow money in order to buy

shares.

We felt that it would be contrary to our
spirit of independence, of freedom.

And well, we spoke about my husband
earlier.

Well, he worked in finance and so he
really worked a lot to find

a solution and he came up with a creative
solution and so we created a new company

owned by all the people who work in Tulips
that we call Ortus, not exactly all the

people but people that we have agreed and
that and who are in the company for more

than two years.

At the beginning, Tulips lent money to
Ortus so that Ortus could buy shares in

Tulips.

And every year, a part of Tulip's profit
goes to Ortus, which helps it increase its

stake in Tulips until it becomes the only
owner.

Thus, at that time,

The directors and the collaborators will
be the new shareholders without having to

take out a loan from the bank.

And this will sustain our core value,
independence.

Okay, so how, so the, has that transfer
happened now in terms of the ownership of

Ortus?

And do you still both have shares in that
other company?

Yes, yes we do.

So in fact, we create this new company,
Ortus, which is the staff company,

finally, to buy Tulips and Company by
steps every year.

35 % are owned by founders.

So Laurent, Camille, and I.

And we have opened 65 % of the capital to
employees, including Laura, Camille, and

So that was the first step.

And this new company is with a capital of
150 ,000 euros just to start.

So 1 ,000 shares at 150 euros.

And to get started, we made an interest
-free loan of 500 ,000 provided by

founders.

And thanks to this loan, this new company
took 20 % of the capital of Tulips.

It was last year.

And then each year, with the dividends
received, Ortus repays part of the loan

and purchases additional shares in Tulips.

So this year...

Autus has 23 % and next year probably 26 %
and every year like that.

And we have some conditions in our
project.

So the obligation to resell shares in the
event of departure from Tulebs with a

capital gain depending on the exit date.

So the price is determined by a fixed
calculation formula based on the results

of the previous three years.

I see.

that gives you, and presumably if someone
new joins, they are then able to buy in as

Yeah, and in fact for that, Lohan had more
shares at the beginning in order to sell

these shares during the years.

I see.

so if someone have you had anyone leave
yet?

Have you had to deal with that situation?

Yes, yes, we have one.

Okay, and did that was it all kind of was
it all clear and went to plan?

It was clear and easy, even if she wasn't
very happy with it, but it was the rule,

so it wasn't difficult.

Okay.

And is this type of structure?

Is this like a common way of doing things
in France?

Or is this something that your husband
devised that was kind of unique to your

situation?

really imagined it and when he explained
this idea to his banker, the banker was

really very interested and said can I
speak about that to other companies

because it's smart and it can be helpful
for a lot of other companies.

So I don't think it's very usual.

I'm sure there are other

schemes of transmission, but this one is
really a smooth way of selling the company

and without a lot of effort for the people
buying it, so it's really a positive.

And what for you both as the founding
shareholders, are there any kind of tax

benefits to doing it this way?

Or is there a sort of financial advantage
or have you kind of chosen a route which

actually isn't, that isn't necessarily the
primary motivation?

It was not the primary motivation but in
fact because we had these chairs since a

long time and we stay with these chairs
for a few years it's also an advantage in

terms of physicality.

Okay, so essentially...

And in fact, we had three key rules in
this project.

The first one was what said law, so the
shareholding was not intended to force

newcomers to borrow money.

But the second one is that the project had
to be relevant and interesting for funders

too.

And the final one,

I think the most important is that we
really wanted to stay independent without

any bank or debt, which is key for a
sustainable future for our company.

Because essentially the setup means that
the company is using its own money,

really, to buy you out.

but you're completely comfortable with
that, are

Yeah, in fact, that's very fun at the end
because if we win a lot of projects and if

it's a big year for us, of course, we will
have more dividends at the end.

And at the same time, the value of our
company is bigger.

So we have more money to buy something
which is more interesting and with more

value.

So at the end, that's quite the same.

Of course, the value could be more
interesting for everyone or less, but it

will be around 10 years.

and even if it's big years or small years.

Okay.

So over the so in 10 years or in seven
years time, when it when this completes

the, the employees will own 65%.

You will retain.

Okay.

I had another question and it's just gone
from my head.

What was it?

It's completely gone.

Hahaha

We can tell you what happened when we
informed our colleagues.

yeah.

Yeah.

Yeah.

How did they respond?

well very well they were a little
surprised but not totally surprised

because I think it's so coherent with all
our way of managing tulips that it wasn't

that surprising and they were really
very...

how would you say that?

grateful, they were very grateful because
it was a recognition of the importance

that we see in each person and that was
really a great day we will never forget

and we we had a few drinks after that and
and it was really what struck me most was

that I heard the two youngest speaking
together and saying, well, in 25 years,

you will be the finance director and I
will be the producer.

it was really fun to see how they were
imagining their future within Tulips and

Company on a very long term.

I'm not sure that they will stay within
Tulips.

that long, that time, all that time.

But for the moment, they are really
involved in our adventure and that's

great.

And we were saying at the beginning that
last week we were in a seminar, an annual

seminar in the countryside and you really
felt an engagement of all the crew that is

incredible, incredible.

And how will you manage the sort of
management of this new business?

Because it's, we'll have a lot of
shareholders and what provisions have you

put in place for, is there a kind of lead
managing director or how have you

approached

To be honest, we don't really know.

Because, no, in fact, we had this
discussion with Laurent and we said, we

will see during 10 years, it will happen
many, things during these years.

But what we know is that we create an
executive committee.

within tulips, with law, with our
financial director, with the director of

production and the director of sales.

And it's very important to make decisions
on our daily basis, sales and work.

And we organized, for example, together
the seminar in order to ask the good

questions to our people and to share on
the future of tulips.

So we share a lot and we share our vision
with them.

And for example, there is a key fact
because we don't want to grow too much.

And sometimes it's difficult to understand
and to do that.

So we have to explain and we have to find
solutions together in order to choose the

good projects, to develop these kind of
projects.

So we want to dig our own furrow, in

So, for example, our project, our purpose
is to produce less media, but more

ambitious and better.

And at the same time, we are committed to
a pragmatic and ambitious CSR approach,

which is one of our fundamental
principles.

We try to do rather than say.

So it's a long way.

For example, we have been calculating the
carbon footprint of all our projects since

2018, reducing what we can reduce through
our choices and through our organization

with our customers.

and by bringing on board our service
providers, freelancers, suppliers, but of

course our staff.

So they have to be involved in this area
with us.

And of course, it's more interesting if
they are involved in this perspective, but

also as shareholders.

So on your question, I think it's
important to launch a new dialogue.

And at the same time, because of
shareholders, we have to make decisions

each year and sometimes each month.

And so we hear people, but at the end, we
have to decide something.

We can't stay with everyone and with each
voice.

We have to organize this dialogue.

So it takes time, but it's helpful.

colleague Camille is the president of
Ortus.

So we chose that it would be someone else,
the third shareholder.

And I think that it's also a symbol
because she's younger than the two of us.

And so it's a first step to...

to sharing our governance.

So sort of looking back on this project
that you've put together, with the benefit

of hindsight, is there anything that you
think you would do differently if you were

to do it again?

No, for me, no.

In fact, I'm very lucky like that.

I remember the day when we exposed the
project.

And I remember one person representing the
staff who stood up and addressed everyone

saying, how lucky.

they all were to have come across us.

So it was, of course, very strong to us at
the same time.

I remember one of our people in finance
who is very young and said, OK, I don't

know if I can put some money, but I see
all the key figures all the day because

I'm on finance.

And if I can do that, I bring many, many
mallets with money.

So it was fun.

Another one who is in production and very
strong to deal with suppliers said, OK,

that's very interesting.

I want to be part of it.

But can I buy something this year?

and more next year.

And I have a discount next year and
everything like that.

So it was very funny to see that.

So.

market, trading.

yes and even when our colleague left us,
the one who left us, well she had to sell

her shares and some of other colleagues
asked if they could buy the new shares and

we...

what was she not happy about?

What was her issue?

She was a bit difficult.

It's difficult to speak about her, but...

I can cut that out if you want.

Yeah, yeah, no problem.

Yeah.

yeah, have to, I think it's, yeah, we have
to cut that after, we can share with you,

Barnaby.

So finally we have fired her because it
was difficult.

She wanted to be a boss, a big boss in our
company.

And in fact, finally we have no boss.

Of course, we've learned we are the
bosses, but our Yeruashi is very,

flat.

Yeah, flat.

Yeah, yeah, yeah.

flat, thank you, flat.

And it doesn't work like that.

So we ask for many things and to write a
strategy in order to imagine what could be

this new market and a new project.

And it doesn't work at all.

And then we had to fire her.

And it was hard for her and for us.

But finally, thanks to our status,
everything was clear.

And we knew exactly what to do.

So for this part, was quite easy,
fortunately.

Yeah, okay.

That bit will cut out.

it, in terms of legally putting this
together, did it cost much money to do it?

Did you have to get lots of lawyers
involved?

Or how did that

Thanks to Laurent, not at all.

Laurent was at the head of this project in
terms of finance and terms of laws too.

So it cost nothing.

And on your first question and the
question

what we have to do differently.

In fact, there is one thing, I don't know
how to do that, probably one thing,

because we told to each people that we
should ask them personally and

confidentially by mail if they were
interested and what share they wish to

buy.

And of course,

everyone was very interested and they
wanted more than we can sell.

So of course we warned them that the
current owners will retain a significant

share in the company and that no one will
have the share they might hope for.

Of course, there is something after that
when you say, you ask for 4%, but finally

you only will have 2%.

You can have some deception.

And also because you have a comparison
with others.

So it was important also to explain, to
explain really

why this guy or this woman has four
persons and this one six and this one two.

So this part was the most difficult part.

After we explained it was easy and it was
okay but you can explain before

that you can't buy what you want.

When you know that you can't buy, it's
sometimes difficult.

Yeah, yeah.

Okay.

Well, great.

mean, thank you very much for sharing that
story.

And I think that's that's probably a good
place to to wrap it up.

Is there anything else you wanted to add
about the process?

not really about the process, but at the
end there is something a little bit

strange because on the one hand it's
fundamental change with our team and on

the other hand it doesn't change anything
on a daily basis.

So we deal on salaries and...

and we talk about everything like before
and at the same time in terms of vision of

sharing about 3Dips and its future, it's
very different.

Yes and really it strengthens the company
and the spirit of the company and we all

share really the same goal to produce
creative films for useful issues and

that's really a great thing to live.

Great.

OK.