Nature Has a Seat: Biohabitats' Evolution Into a Purpose Trust

In this episode of Bicycle for the EO Mind, we speak with Keith Bowers, founder of Biohabitats, an ecological restoration firm that transitioned to a Perpetual Purpose Trust in 2023. Founded in 1982, Biohabitats has spent over 40 years restoring the earth and inspiring ecological stewardship. Their unique transition preserves the company's values and mission for generations to come.

Key Takeaways:

• Keith's deep ecology philosophy that "we are the rocks dancing" reflects Biohabitats' understanding that everything in nature is connected and alive.
• Unlike selling to private equity or competitors, the Perpetual Purpose Trust model allows Biohabitats to practice capitalism differently - prioritizing purpose over profit maximization.
• In a groundbreaking move, Biohabitats legally codified nature as having a seat on their Trust Stewardship Committee, with Keith serving as the initial "Nature Guardian".
• Rather than completely exiting, Keith has transitioned to a role where he can focus on the ecological restoration work he loves while leaving operations to new leadership.

Click here to watch this episode on the Zolidar YouTube Channel.

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CHAPTERS

• (00:00) - Introduction to BioHabitats and Keith Bowers
• (02:39) - Legacy and Transition Planning
• (05:24) - Employee Ownership and Governance Structure
• (08:15) - Valuation and Fairness in Buyout
• (10:40) - Financing the Transition
• (13:47) - Education and Stakeholder Engagement
• (16:14) - Choosing Advisors and the Deal Team
• (18:51) - Matrix Analysis for Ownership Models
• (21:50) - Legal Considerations and Trust Formation
• (24:31) - Celebration of Transition and Future Vision
• (30:26) - Navigating Legal Complexities in Business Transitions
• (32:52) - Dismantling and Restructuring: The Case of Biohabitats
• (36:36) - Purpose-Driven Governance: The Role of Trusts
• (40:09) - Checks and Balances: Ensuring Accountability in Purpose Trusts
• (44:03) - Leveraging Technology for Seamless Transitions
• (48:04) - Post-Transition Reflections: The Impact of Purpose Trusts
• (51:21) - The Role of Nature in Business Governance
• (54:45) - Advice for Future Business Exits: Planning for Legacy
• (56:27) - Connecting with Keith: Resources and Next Steps
• (58:04) - Introduction and Call to Action
• (58:50) - Podcast Outro

CONNECT WITH BIOHABITATS

REFERENCED IN THIS EPISODE:

• Keith Bowers (Founder)
• Biohabitats' Leaf Litter Journal

KEY TERMS USED IN THIS EPISODE:

• PPT (Perpetual Purpose Trust)
• ESOP (Employee Stock Ownership Plan)
• S Corporation
• C Corporation
• AOE (Alternative Ownership Enterprise)

© Copyright 2025 Zolidar, Inc.
Note: This podcast is not investment advice and is intended for informational and entertainment purposes only. The views expressed in this episode are solely those of the guest(s) and do not necessarily reflect the opinions of the host or Zolidar.

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Creators and Guests

Host

Matthew Epperson

Bicycle for the EO Mind Host, Employee Ownership Domain Expert at Zolidar

Guest

Keith Bowers

Keith Bowers | Founder Biohabitats'

Producer

Sana Saeed

Bicycle for the EO Mind Producer

What is Bicycle For The EO Mind?

Most small and medium businesses (SMB) struggle to sell — employee ownership is a proven exit path. Hear real stories from business owners who transitioned through employee ownership. Whether you're an owner, advisor, or investor, we dive into expert insights, practical strategies, and how technology is reshaping exit planning.

Matthew (00:05)
All right, everyone, welcome back to Bicycle for the EO Mind podcast. Again, I'm your host, Matthew Epperson. And today I have the honor of speaking with Keith Bowers with Biohabitats. How are you today, Keith?

Keith Bowers (00:15)
You're doing great, Matthew. I'm happy to be here.

Matthew (00:18)
Amazing. to kick us off, I was curious, what might be a favorite quote of yours and why?

Keith Bowers (00:23)
Yeah, you know, I've always tried to study deep ecology and there's a quote from, I believe it's George Sessions, who was a deep ecology thinker that said, we are the rocks dancing. And I love that quote because it, for me, it brings to mind that everything is living, including the...what we consider sort of innate objects in nature and that we are also composed of rock and mineral and so are all the other more than human species out there. So I just really love that quote because I think it summarizes that really well.

Matthew (01:03)
So let's start at the earliest stages of your process before you even knew about employee ownership rather perpetual purpose trust or decided to become a perpetual purpose trust at your day zero. So what prompted you to consider selling your business?

Keith Bowers (01:17)
Wow, yeah, so I've been at this since 1982. I actually started biohabitats as soon as I graduated from college. And so it's been a while, literally. It's literally been, you know, 40 plus years. And so about maybe eight or nine years ago, I started giving serious consideration to what kind of legacy did I want to leave in terms of Biohabitats and thought about I can't keep doing this forever and certainly I need new leadership to come in and started thinking pretty long and hard back in 2015, 2016, 2017 about how I would transition bio habitats to its next life.

Matthew (02:02)
Yeah, and so, could you walk us through the initial actions you took when you started looking to planning your exit and who did you turn to for guidance and why did you choose them?

Keith Bowers (02:12)
Yeah, so I think a couple of things. First, I looked inward both in my values and what kind of legacy I wanted to leave, as I mentioned before. But I also looked at the values and mission of biohabitats. The mission of biohabitats is to restore the earth and inspire ecological stewardship. And while I have always been the recipient, like many small firms, of private equity and larger corporations wanting to come in and purchase us. I always didn't, I felt like their values and their mission wasn't aligned with the values of biohabitats, the mission of biohabitats and my own personal sort of values about the way capitalism is currently practiced. In other words, I think that while capitalism has lifted millions of people out of poverty, it's given us extended life spans, it's done some really great things. It's also what we're now finding out that it's probably one of the leading causes of the loss of biodiversity, certainly climate change, income inequities, social injustices, that sort of thing. And so I didn't want to keep perpetuating that. I wanted to think about a structure for the company going forward that thought about practicing capitalism in a different way that still embodied the values and mission that we had. I think the other thing is when I started Biohabitats back in the 80s, I started a private stock ownership plan within Biohabitats. So right away, I saw the sort of value to have people purchase and award stock to people that are a part of Biohabitat because I always felt like it's not just me, it's everybody else working toward a collective goal. so to continue that sort of employee ownership model, although it wasn't an ESOP, it was private stock ownership, that was also important.

Matthew (04:18)
I know you formed a couple of committees that were part of this process too. Could you talk about like how those came together?

Keith Bowers (04:23)
Yeah, so you know, I first so I've been very familiar with ESOPs and employee stock ownership plans and co-ops. Back in 2017, I was part of a group, a cohort group that I belong to of entrepreneurs, that really talked about or we were in a discussion one day about transitioning businesses and one of the leaders of one of the companies that was in that group suggested non-charitable trust. And I'd never heard of that before. I mean, I'd heard of trust before, but not a non-charitable trust and thought, huh, that's interesting. What's that all about? And so I started digging into that over the next year or two and learned more about what a non-charitable trust is, about employee ownership through those types of trusts. About purpose owned trust, and that really intrigued me. And so When I looked at Biohabitats, there were three sort of components of this that I needed to consider. One component was, okay, if I'm gonna change the governance, I'm gonna need everybody, or I'm gonna need people within the company to help me design this new governance structure, because I'm not gonna be here. That whole reason I'm transitioning because I'm going to be transitioning out and I don't want to design a governance structure by myself and impose it on the rest of my team members. I wanted them to be a part of the process, right? And then I also recognized that new leadership is coming in. And again, I wanted to make sure that everybody, all the team members were bought into that new leadership model. And then the third component was, well, gosh.

If we are not going to sell to an outside organization, that means we have to internally finance this, this sort of buyout. And so I needed the expertise again, internally of, okay, If we're going to finance this internally, we want to do it in such a way that yes, the shareholders within bio habitats are made whole and we give a fair price to the stock that they hold.

But in the meantime, we're not hampering the long-term viability of biohabitats by burdening them with a lot of debt. So we actually formed three subcommittees within biohabitats, one on governance, one on finance, and one on leadership.

Matthew (06:57)
Got it. Yeah, that's a really interesting way that you've took those different roles and responsibilities and created those structures with those committees. You were touching there on a couple of different things, such as the need for internal financing. How are you all thinking about putting that together when you're starting to contemplate what might this exit look like? How might it be fair?

Keith Bowers (07:17)
Yeah, really good questions. And that was something that we had to put a lot of thought into. So we like I said, we started a private stock ownership program within bio habitats back in the 1980s. We had a stockholders agreement that basically laid out the value of each share of stock. Right. So when people let people that had bought into that and had left bio habitats, we were obligated to pay them out and pay back their stock based on a certain value calculation. So we knew what that calculation was. There was 32 shareholders in Biohabitats when we started this process. We knew what that stockholder valuation was, but we also recognized that if we went out on the open market and sold Biohabitats to one of our competitors or to a private equity firm, we could probably get a lot more, maybe not a lot more, but more than what our internal stock ownership shareholders agreement was calculating. So what we did first is we hired a mergers and acquisition firm to actually do a valuation of our company as if we were going to go out on the open market and sell the company. And we actually went through two different valuations because we wanted to make sure that we weren't just relying on one firm or one model to do that. And then we came back and we looked at what that valuation was telling us if we went out on the open market versus what our shareholders agreement was telling us. And we said, okay, there's certainly a gap there. We probably can't afford to finance an internal buyout of the shares if we went with the external valuation model. But we also wanted to be fair to all shareholders.

So we actually came up with a price that was in between. That was more than what the stockholders agreement suggested, but wasn't quite what we would get if we went out in the open market. And there we had to go back to all 32 shareholders and say, hey, this is what, you know, this is the price or at least a range. This is what we're coming up with. This is what we would like to offer everybody as the valuation when we make this transition, are you okay with that? And gosh, Matthew, every shareholder said absolutely yes. Yes, this is the way we want to go. We love this model that we're exploring and developing. And yes, we will agree to that share price. So that was really, you know, really great to hear. And it didn't provide any stumbling blocks for us.

Matthew (09:58)
Yeah, it sounds like having the 32 folks were already... I'm imagining Fairly Values Aligned to start with probably helped a lot.

Keith Bowers (10:04)
Yeah, it It did. And again, our values and our mission are so important. And I think that's what draws people to work with us. So, you know, sort of in some way, we're self selecting those types of people that value and mission is, you know, right up front there. Obviously, everybody wants to make a good living, get paid fairly, that sort of thing. But certainly, I think most of the people that work with bio habitats, it's first and foremost because of our our mission and our values.

Matthew (10:33)
And just to go deeper on that for a moment, so I understand that some were immediately bought out and some weren't. Is that correct?

Keith Bowers (10:40)
Yeah, so out of the 32 shareholders, there was really six shareholders that had a substantial amount of stock in the company. And we recognized right away that we couldn't buy everybody out right at the beginning. So what we ended up doing was we developed a model and we went through a modeling exercise where we looked at our cash on hand, we looked at future potential profits and we looked at going outside to get some sort of loan to help bridge the financing there. And we played with that model, good years, bad years, what if the economy collapses, what if we do great, you know, that sort of thing. And what we landed on was that all but six shareholders, we felt comfortable buying out completely when we settled on this transaction. And out of the six remaining shareholders, me being one of them, what we said there was we have biohabitats where the trust has three to seven years to buy out those remaining shareholders. And again, we had to go back to those shareholders, the other five, including me, and say, are you okay with this? We can't buy your shares out right away. It'll be over this period of three to seven years. Of course, it's interest bearing. But you're taking a slight risk because, you know, it all is predicated on we're doing well, we're making a profit, and we're getting our financing in place. But again, all the shareholders agreed.

Matthew (12:15)
Thanks for explaining that and you know, I you also mentioned bringing in potentially a bank loan And I know that wasn't always the easiest piece of that equation You could say more there

Keith Bowers (12:26)
Now it's interesting Matthew because we had to first educate both our accountants and our banking institutional what a non charitable trust is that we were transitioning selling biohabitats, which was an subchapter S corporation. we were buying up all the shares and essentially the biohabitats purpose trust is the only shareholder owns one share right?

So all the ownership goes to the Biohabitat Purpose Trust and really our banking institution and our accountants had never heard of that. This is, you know, it's quite new to them. So we had to go through a bit of a process, education process, which was great. You know, they came on board and the bank came to bat for us and basically said, you know, we need a certain amount of a loan just so we can feel comfortable bridging this over the next three to seven years, are you on board? And they came through and said, absolutely, yes, we'll help you out there. part of it is we're hoping that we don't have to draw on that loan, that our profits going forward will be able to finance the entire buyout. But the loan is there in case we hit a roadblock and we have to draw on that loan.

Matthew (13:47)
Yeah, it sounds like it really throughout this process, it's been like you know, assembling all the right people who all see the vision and how to have the certain values alignment, including the bank. Yeah.

Keith Bowers (13:58)
And we do, because we do design build work, means we do design for ecological restoration projects and nature-based projects and green infrastructure. We also do the construction, which means that we have to go out and get bonding to bond our projects. And our bonding company had never heard of this either. So we had to bring them on board to talk about the ownership model and what that means. And again, they were great with the whole thing and we helped educate them and they are totally on board and that's been really good to see.

Matthew (14:36)
Awesome. Yeah. And I do want to definitely invest some time in talking about the education that you all have done because you've educated quite a lot of the people who have been a part of this process. to linger a little bit still in this sort of pre-feasibility space, I was curious, can we take a step back to sort of, you know, oftentimes this term quarterback is used. That kind of indicates like someone who already like knows that world well, in this case, the perpetual purpose trust world, and could play a sort of a steward. Well, steward has its own sort of meaning here, but a quarterbacking type of a role. who would you say that there was a party who did that in this transaction?

Keith Bowers (15:06)
Yeah, absolutely Matthew. You know, again, I did my own sleuthing on the Internet and talked to a few people, but recognized that if we were going to go forward with this and we form these three committees that they would need guidance and we would need guidance through this process. So we ended up, I ended up finding about organically grown company, thank you. Organically grown company, which was one of the first companies in the US to convert to a purpose trust. And I reached out to them and they referred me to Alternative Ownership Advisors, AOA, which consisted of Natalie Reitman White.

Matthew (15:27)
Organically grown company.

Keith Bowers (15:47)
Who was or is on the board of organically grown company and was the sort of spearheaded the whole process of that transition. I think they went from a nonprofit to an ESOP to a trust. So she was there in that whole process. because they were getting so many inquiries about what they did, they formed sort of this side company, Alternative Ownership advisors to help companies like us go through that process. So we contacted them. We asked them to put a proposal together for us. We interviewed them, talked to them, and ended up hiring them to work with us over about a two, maybe a little two and a half year period to take us through this whole process. And I would say the other thing, Matthew, is that while we were enamored with the idea of a purpose, trust owned company. We also really wanted to take a step back and do our homework about ESOPs and do our homework about co-ops and think about are there any other kinds of employee ownership models out there. And Natalie and AOA did a really good job of walking us through the advantages and disadvantages and challenges associated with each one of those models so that we could get a clearer perspective is a purpose-owned trust, model we want to go forward with. So, you know, again, I think having that time, not rushing into it, but having that two-year period to really think through that, to do some exploration, to talk to other folks really then helped us. And I think it helped our team and our whole staff become much more comfortable with the idea.

Matthew (17:38)
Yeah, and appreciate you kind of walking us through that. So you mentioned like and I understand you all use the matrix. Is that right?

Keith Bowers (17:44)
Yeah, they developed this little matrix that helped us just, you know, categorize things, but that was very helpful.

Matthew (17:52)
Yeah, so what was in the matrix?

Keith Bowers (17:55)
Well, again, they took us through and they, you know, basically, what's the governance structure of each one of these models? Is it susceptible to outside entities coming in and purchasing or taking over? What type of ownership frameworks can be employed with each one of these models?

Are there any restrictions or are there any tax advantages associated with any one of these models? Are there any other legal restrictions or legal requirements? So it kind of took us through both from a, okay, how protected would our values and mission be going forward in any one of these models? How protected would biohabitats be from outside forces? But also thinking about tax advantage legal requirements, day to day governance, that type of thing.

Matthew (18:51)
Yeah, amazing. So, okay, so protecting the values of the company, protecting the company itself, tax advantages, those were kind of the prime considerations. And you mentioned having the time, so taking those two years, how long would you say like you were working with the Matrix before you felt like you had a strong answer?

Keith Bowers (19:07)
I think that maybe was a month or two. You know, it wasn't it wasn't I think again, because we went into this process already enamored with the idea of a purpose trust. But we wanted to make sure we weren't.

We wanted to make sure that we weren't missing something from these other models, right? That something didn't just jump out and say, hey, it's much better to go with an ESOP or a much better in your case to go with a co-op. We wanted to just test it out. So it didn't really take that long to do that. I would say it might take some other organization or our other folks maybe a bit longer if they're really unsure about which model to go with.

But again, we were using it more as validation for the path we were already on.

Matthew (19:57)
Got it. And so you mentioned also with the process of choosing AOA that, you you found them, you did some sleuthing, you were online, you asked for a proposal. Did you ask any others for a proposal or was it kind of like, it flowed from feeling enamored with the purpose trust?

Keith Bowers (20:12)
Yeah, actually we didn't ask anybody else and we found a couple of other firms out there that I've got to know a little bit better since then that offer those types of services. But really our sort of initial conversations with Natalie and Peter Kohler, who was part of AOA at the time, we felt like they were aligned with what we wanted to do.

We felt like them coming from organically grown company that even organically grown company, their values and mission was aligned with what we're about. And so that alignment there was really important to us. And the fact that they both had been through that process before, I think really helped in our making that decision.

Matthew (21:00)
Great. And we're already sort of here, but I just want to mention, so we're kind of moving to the next phase, right? So we're getting more or so into the actual thick of the transition itself. So we often use this term deal team to kind of refer to like all the different people and players. You know, you've got your quarterback in place now, you've got some committees you've assembled, but of course we know there's going to be a lot of folks involved. So maybe you could talk a little bit about what types and numbers of advisors were involved.

Keith Bowers (21:26)
Yeah, great. So again, we had alternative ownership advisors and we had really three people there, Natalie, Peter Kohler, and Ellie Griffin. And Natalie really spent the time walking us through the governance issues. Peter worked with our CFO and our accountant on the financial modeling of how this would work out.

And Ellie was sort of the cheerleader project manager who kept everybody in line and the schedule moving forward and our pace moving forward. And so we felt really good with how that whole process worked. But what we also learned was that our biohabitats attorneys, again, had no experience in this. And so we talked to AOA about some attorneys they would recommend that have had some experience in this. And they recommended two attorneys, one Gunzik and Heger, and they're based out of California. we, Biohabitat, Biohabitats Incorporated actually hired them to represent Biohabitats. And then it was suggested we really need a separate attorney based on conflict of interests to represent

The Biohabitats purpose trust. Right, so we were forming the trust so we actually hired another attorney out of Portland, OR called Stoel Rives and they were great and so they represented bio habitats purpose trust. The other attorney represented bio habitats incorporated so we needed those two. Personally Matthew, I had to hire an attorney because I was the largest shareholder. I wanted to make sure that whatever shareholder transaction took place, at least personally from my standpoint, that it was, I felt comfortable with it and it met my expectations. So I ended up hiring an attorney. again, as I mentioned before, we went through sort of an education session with our bank and with our accountant, and we kept both of those entities on board through this process.

And then we also then because of a because we were a trust, we needed an administrative trustee. And so we worked with Commonwealth Trust Company out of Wilmington, Delaware to be our administrative trustee. So it was, you know, a good half dozen, if not more entities that were all part of this transaction.

Matthew (23:56)
Yeah, and dealing with such a complicated subject, I'm curious, there many instances where all of you were sort of in the same, either physical or virtual space together, like discussing the transaction?

Keith Bowers (24:06)
Well, certainly virtual space. Yes, there was a lot of us at times all on the call. And I would say that it was interesting because we spent probably the first 80 % of the time, you know, a year, year and a third just with AOA and talking to our bank and our accountant and our attorney, but really on the side more in that educational realm. It wasn't until the last good six months where we started to get close to closing and having the whole transaction take place. Do we bring in all these other entities to work through this process? And so there became pretty busy, lots of people on the phone virtually. I will also say that we held a huge celebration after our closing and some of these folks actually showed up in person and so it was great to meet some of them and and rejoice in what we did. But most of it happened virtually. And you have to remember, this was also back in 21, 22, 23, right after the pandemic. So virtual was what we were all doing then too, right?

Matthew (25:12)
Yeah, were some of those for the first time you'd never met physically before?

Keith Bowers (25:16)
Sorry.

Matthew (25:17)
Were some of those people you had never met physically previously? Yeah. Yeah. Yeah. So also coming out of COVID and yeah, all being together physically for the first time. Amazing. And you say, know, since you already mentioned it, this is often a, we've heard in these stories that a lot of times, you know, selling owners like to have a sort of particular, maybe special way that they kind of unveil the fact that the ownership has changed. Was that true for you all?

Keith Bowers (25:41)
That was true for us. We actually formed the Biohapitalist Purpose Trust in April. And because of the ecological work we do, we're big on Earth Day. And so I gave sort of the direction to the team back in 2021, 2022. I wanted this transaction to happen by Earth Day 2023. And that's when we wanted to celebrate it.

And so that was sort of the deadline we were all working toward. And we did, we rented out some space, we had a big celebration. Lots of people came in to talk family attended. This was out of our office in Baltimore and it was just a wonderful evening and wonderful time and tears were shed and people laughed and celebrated the fact that you know we're now a company that will go on for the next hundred years is our purpose trust and we're all really proud of that.

Matthew (26:43)
Yeah, I'm sure that can only feel like such joy, but also relief. mean, when you've invested so much in your mission to then think, wow, we figured out a way to keep it this way. Yeah. Kind of takes off a certain anxiety in a way.

Keith Bowers (26:55)
Yeah, it's not only that we've found a way to keep it that way, which I think was important not just for me, but for a lot of people at Biohabitats. We also are really excited about demonstrating that this is a different way of practicing capitalism, right? That we can share profits with stakeholders, that purpose and mission is above anything else. That it's about pace sustainable growth over the long term versus short, know, maximized profits at the expense of people. And so we really feel good about that idea and feel like, okay, now we actually have to prove that we can actually make this work, even swimming in the sea of how capitalism is practiced right now, not only in the US but around the world but we can demonstrate something different.

Matthew (27:52)
Yeah, and I definitely want to hear more about how it's going. I did want to ask you too, so we've already touched a little bit of on how much you've invested in educating all the different stakeholders. I was just curious about the bonding company. If there was anything you wanted to say about like, what does it mean to educate your bonding company about our perpetual purpose trust?

Keith Bowers (28:10)
Well, I think it's first of all, remember we were at S Chapter Corporation, which meant that all the equity and the liability goes to all the shareholders. And so a bonding company is always looking at, OK, if something goes wrong, who am I going after? Right. So that's that was all of us. That was the shareholders of BioHabitat.

And so the bonding company said, okay, I feel good. I've got 32 people. I could go after something goes wrong. Now you're turning into a perpetual purpose trust. There's this trust entity there that really doesn't have, doesn't own anything financially. They own the only share of bio habitats. Who am I going to go after if something goes wrong? Right. and so they lost that ability to do that. Like any lending institution would. And so they had to get comfortable with the idea that, okay, it's not the individual shareholders anymore. It's the company, but it's owned by this trust. So what does that mean? And so just really educating them on the intricacies of that governance structure and how liability flows through was just really, it was important and they got it and they got behind it and they felt comfortable with it. So we didn't lose the step with them in terms of our bonding capacity or with the bank in terms of their lending capacity for us.

Matthew (29:42)
Yeah, that's what I was going to touch on as well because I often hear that's a very similar conversation about bank financing that we're so used to a personal guarantee for a very similar reason. Was that at all of a barrier in this case?

Keith Bowers (29:53)
No, it wasn't. Not at all. think, Matthew, is again, you got to remember we have had a 30, 40 plus year track record, right? And so we, know, knock on wood, have never defaulted on a loan or never have had a bond closed out on us. And so, you know, having that track record and the bank we've been working with, we've been working with for well over 25 years.

Matthew (29:56)
So they came to a similar understanding.

Keith Bowers (30:19)
And so building those relationships, having that track record goes along.

Matthew (30:26)
And yeah, speaking also about sort of liability and how we think about it, I know there were so many legal documents that were created in this process. You mentioned too many to count. How did you find out what documents would be necessary in the transition?

Keith Bowers (30:37)
Again, that was a combination of AOA plus the attorneys we brought in. the AOA helped. What AOA did was they gave us a sort of, I would say, template of here's all the things the attorneys are gonna require from you when they present the closing documents to you. Let's make some decisions now so you're not wrestling with it at the last minute. So that was really helpful, right? So we were able to then, go through, take time if we needed a week, if we needed a month to go back and really wrestle with something about how a certain governance structure would work or liability would work. We could do that and not be on the clock with the attorneys, right? And that was really helpful. So by the time we got to closing and the attorney said, okay, we've got to fill in all these blanks. 80 % of those blanks we could fill in right away without spending really any time.

Matthew (31:36)
Yeah, and just to underscore that for a moment, sounds like, yeah, the preparation is what really saved a lot of time, but also a lot of money once you're actually working with the attorneys.

Keith Bowers (31:43)
That's right. Yeah. That's not to say though that I think one of the things that surprised us most with this whole transaction is the amount of time and effort it did take putting all those closing documents together, shuffling. We had to remember we had to dismantle one company and then structure a new company and the trust all at the same time. And so I think we underestimated the amount of paperwork and the amount of documents needed and to also buy out all the shareholders and develop those stock redemption certificates. I think we underestimated a bit the amount of time and effort it would take that last, you know, I think I mentioned it's like the 80-20 rule, right? That the first 80 % of the time it took 20 % of our effort and the last 20 % of the time it took 80 % of our effort because we had to go through all those documents. Though that's not to say that AOA provided a great service in, like I said, many of the things that would have been sticking points we had already hashed out.

Matthew (32:52)
Certainly. you so you touched over this very quickly, but I definitely want to dive a bit deeper. And when you say dismantling the company and forming this trust. So can you say a bit more about that?

Keith Bowers (33:02)
Yeah, so in our situation, we had actually an umbrella company called Biosphere that owned Biohabitats Incorporated, which is subchapter S, and we had a couple of other entities under that umbrella, minor entities. And so when a come, so the trust owns Biohabitats, but a trust can't own a subchapter S company can only own a C corporation in the United States. And so what we had to do was dismantle biosphere, dismantle the entities under biosphere, turn biohabitats from an S corp into a C corporation, and put that under the umbrella of a purpose trust, which we had to create the governance structure for and allow that purpose trust to own biohabitats. Also then had to develop a whole governance model for the Biohabitats Purpose Trust. Like we could keep our board of directors, like the Biohabitats Incorporated is a C corporation, has a board of directors. We have a leadership council that we use to run the day-to-day operations of Biohabitats. All that sort of stayed intact, although we did put in new leadership.

The governance structure didn't change that much. But with the Biohabitat's purpose trust, we had to create a whole new governance structure. So we created a trust stewardship committee, which is a board that oversees the governance of the trust and oversees any entities that trust owns. So since trust owns Biohabitats Incorporated, Biohabitats Incorporated has to adhere to the purpose and the objectives of the trust and the trust's stewardship committee is responsible for making sure that Biohabitats adheres to that purpose and objectives.

Matthew (35:11)
Okay, yeah, so that is starting to sound a little bit like a nested egg in a way. Some complicated interlocking structures here. Could you maybe break that down just a little bit more? So like, does that C Corp Board of Directors relate to that trust stewardship committee?

Keith Bowers (35:24)
Yeah, so we have so that the trust committee five people in the trust committee and the trust committee has the authority to hire and fire the president of bio habitats. So that's where the that's where the link occurs and that's where the accountability occurs. So, for instance, if bio habitats is not adhering to the purpose or objectives of the trust and the trust committee says, okay, you're not doing that, you need to fix it, and they're not fixing it, then the trust committee has the right to go in and fire the president and hire a new president that will rectify any problems associated with following the purpose and objectives of the trust. So there is a board of directors of Biohabitats Incorporated and that board is solely there to help govern BioHabitat's incorporated. There's a president and secretary and treasurer, but the connection is between the Trust Stewardship Committee and the president of BioHabitat.

Matthew (36:36)
Got it. And just to check my own understanding. So I know that typically, say, a board of directors is charged with, like, say, the financial success of the company ultimately and holds a CEO accountable to remaining profitable, for example. That's right. But in this case, we've got a trust stewardship committee that's looking after a purpose. And I'd love for you to define what that purpose is. But they're also looking out for where there might be a differentiation, I guess, between the profit motive and the purpose. Is that right? Yeah.

Keith Bowers (37:02)
Right. the purpose is to provide or to have to bring it up. It's essentially to restore the earth and inspire love for wild places, but also to ensure that biohabitats is financially viable. That's the key right there. Right. So if Biohabitats lives up to the other parts of the purpose but isn't financially viable, then that's a breach of the purpose of the trust. And then there's five objectives associated with that that I'm happy to provide as notes or otherwise for your listeners. And some of the, or one of those objectives has to do with the financial viability of the company going forward. Right?

So every year the trust evaluates biohavocats and says, are you meeting the purpose and are you meeting these objectives? And if you're not, here's the things you need to do to correct.

Matthew (38:06)
Yeah, that actually reminds me that it worked fairly similarly and well, in a certain respect, I used to work in the natural foods grocery space. And one of the things about that is we would use what was called ends. So an end statement was sort of like a purpose statement. And inevitably, we'd have to like report very similarly, say, like, are we achieving our ends? And if not, then there was a certain prescribed way which we had to say, like, well, remediation would have to occur within a certain period of time. Is it kind of similar in this case?

Keith Bowers (38:32)
It is kind of similar in this case. Yeah, and there's even another Check and balance in this we have what's called a trust enforcer. So this is an outside entity that has the power to come in and replace the trustees if the trustees aren't enforcing the purpose and objectives on the entities that that trust owns, so we have an environmental attorney that is our trust enforcer that's not associated with biohabitats and her job is to make sure that the trust, the board of trustees is enforcing that. there's a series of checks and balances built into this whole system.

Matthew (39:22)
Yeah, it's really like a multi-layered purpose machine. Yeah.

Keith Bowers (39:25)
Right, exactly. Purpose is the core. And that really helps to protect biohabitats from outside entities coming in and wanting to, well, it would be really hard to purchase biohabitats under this scenario. But if something like that were to happen or if biohabitats found themselves in a situation where in order to make themselves financially viable, had to get outside financing to make that happen. That financing couldn't, and the people behind that financing couldn't alter the purpose or objectives of biohabitats and the trust.

Matthew (40:09)
Got it. And just to mirror that back quickly. So it sounds like if someone were to make a third party offer, maybe a competitor, who knows, but they were able to make it to where like it made financial sense. So maybe it was like an above market offer, but then they would also maybe somehow guarantee the preservation of the purpose that that might sort of kick off having to consider that offer at least.

Keith Bowers (40:32)
So in ESOPs, you're obligated to consider offers when an outside entity comes in and offers a share price higher than the ESOP share price. In a purpose trust, you're not obligated to. So there's no obligation to entertain any kind of outside entity coming in and offering because there is no share price. Basically, the trust owns the only share. All the profits in the company now go to all the employees, not to shareholders. And they're distributed amongst all the employees. And so really, there's no stock to purchase in biohabitats.

Matthew (41:21)
Yep, got it. Thanks for explaining that. With regard to all these sort of different moving legal parts, did you feel like it was a priority to read and understand, like read and understand all the documents that were involved? And if so, did you also find yourself like sort of translating those documents to employees?

Keith Bowers (41:44)
Not necessarily to employees because we had our committees, but certainly our committees, right? And certainly there were certain folks in each of the committees that took a more vested and interest in making sure all the T's were crossed and all the I's were dotted. And I can't, I won't sit here and pretend that I read every document and understood exactly what was there. That's why we had attorneys helping us out, but that's also why I have other great team members in biohabitats that can help do that. But somebody had to do it within biohabitats, right? And had to communicate that, these are the issues I flagged here, and this is what we need to come up with in terms of that. Here are the issues that we need to sort of hash out and think about.

Matthew (42:34)
Got it. So it sounds like the those those committees you felt like probably had maybe a bit more in-depth, but granular understanding

Keith Bowers (42:41)
Yes, yeah, totally. Yeah. Cool. And then what we would do, we have a quarterly report out to the whole team every quarter. I've always practiced open book management with Biohabitats ever since we started. And we do these quarterly report outs where we go over all our financials. We talk about future trends. But in this case, over that two, two and a half year period, we were also reporting out to the whole team on the progress we were making some of the decisions we were making and what to expect in coming months.

Matthew (43:16)
Yeah, that's great. Did you have a roadmap for your transition? Would you say you were always aware of the progress, the timeline and associated costs of it?

Keith Bowers (43:25)
I think we were always aware of the timeline because we were pushing that on AOA. They certainly provided a roadmap for us. I would say again, though, the roadmap was good up until the point where, and this is no fault of AOA, it was good up until the point where we needed to bring in all the other attorneys and other consultants to help with the closing. So I think we felt pretty good with that roadmap. AOA kept us sort of on task as we went through that and our committees went through that. So I think that was pretty valuable.

Matthew (44:03)
You kind of mentioned previously, that time and effort were the 80-20, then that, like that 20% at the end requiring 80 % of the effort, there was a little bit of an aha, that like, that was going to be a little bit different than maybe what you were thinking. And maybe some of those extra timelines were driven by these, you know, external parties, like attorneys who are maybe making that. Hard to predict, frankly, like how long will that really take? Um, were there other areas where you thought like, maybe that technology particularly could be helpful in your transition if you had could, if you could do it again.

Keith Bowers (44:31)
Yeah, I think so. think, again, having a technology could certainly help with the roadmap overall. Technology in the scheduling behind that. think technology could help with collecting and sorting through all the documentation that was required. Again, especially all the closing documentation that was required. Right. Just in our case too, making sure that the governance, the financing, and the leadership was in alignment moving forward. Because really, we were making decisions in governance that would affect leadership. There were financing decisions that were being made that would affect governance and leadership. There was sort of this web that was being created, and to have that on all one platform have that available for people to see how that's all working toward one collective whole as you're moving forward would be very helpful.

Matthew (45:35)
Yeah, and just like that web analogy I love. So like how do we see that when you tug the web on one part, how does it impact the other parts? I love that analogy. Could you maybe give us an example of like how impacting one then impacts the others?

Keith Bowers (45:43)
Yeah, yeah. Totally.

Yeah, sure. So when we were looking at different governance models, we also had taken into account how the leadership transition would take place. And if we were changing leadership positions within bio habitats or consolidating any leadership roles and responsibilities, we wanted to make sure that that was in alignment with the governance structure that we were developing, right? So that became really important. So in other words, now the president has the added responsibility of making sure that biohabitats is meeting the purpose and objectives of the trust where before they didn't have that responsibility, right? And then how does that get passed down? How does then biohabitats set up metrics and to demonstrate that they are actually meeting that purpose and objectives. And how are they reporting out and who's doing that reporting out. So all that has to work together.

Matthew (46:54)
And in terms of, yeah, I we were just talking a little bit more a moment ago about documents, but did you kind of have like sort of a deal room or sorry, excuse me, a data room rather to keep those documents together?

Keith Bowers (47:05)
I'm not sure a data room we we had a SharePoint drive that we kept them together, but that was about it. Yeah, and I would say that our our CFO Adam Fuerstein he was unbelievable through this process and he was sort of the person that kept all these documents together and was the glue that held all this together. So Adam did a phenomenal job and really worked his butt off that last six months to make sure that we were in a position to close on this by Earth Day.

Matthew (47:43)
Yeah, thank you for sharing that. And would you say, were there any other tools that you were using that you found especially helpful during, maybe particularly that last 20%?

Keith Bowers (47:53)
Tools, not really. No, Matthew. mean, Yep.

Matthew (47:58)
Fairly old school, you might say.

Well, great. Thank you so much, Keith. So now we're moving into sort of the final phase, post-transition. So looking back, how do you feel about choosing the perpetual purpose trust as your exit path?

Keith Bowers (48:13)
I am so happy with it. think we made the right move for many different reasons. Again, to go back and sort of re-emphasize the idea that it's reinforced our commitment to our values and our mission. It's a way to perpetuate biohabitats into the future. That it's, I think, reinforced to all of our team members and to our clients and to our stakeholders what we're all about and that we're actually out there trying to make a difference both in the work that we do but also in the way we practice our business. So that's been great.

Matthew (48:54)
Yeah, I really love that sort of, seems like throughout the life of biohabitats, you've sort of used this biomimicry approach and really created these structures that also align with the very work that you're doing. So it's very meta pleasing. Yes.

Keith Bowers (49:07)
Yeah, it's sort of biomimicry or eco mimicry, right? We're trying to replicate this idea of an ecosystem in terms of how you and the ecological aspects of an ecosystem and how you operate it.

Matthew (49:25)
So could you say, so what are you personally doing now and how's the business and the team performing?

Keith Bowers (49:30)
So I stepped down as press. So so it's been a it's been an interesting transition for me. I obviously have Sold my shares to the bio has purpose trust so I'm no longer the majority shareholder of bio habitats after 40 years I also stepped down as president so I'm no longer the the leader of bio habitats, which has been actually really, really fantastic. Ted Brown, who assumed that role, has been just phenomenal, in the 10 months since he stepped into that role. So now I'm located in Charleston, South Carolina, and we have our Southeast Atlantic Bioregion office here. And I'm actively working in that office as a practice lead and
business development for this office and leading this office, but I'm also on the board of directors for biohabitats. And one of the other roles, Matthew, that I'm really enjoying is when we set up the biohabitats purpose trust, we set up five trustee, five seats on the trust stewardship committee. And one of those seats, we legally codified nature as a seat at the table which we think is the first time in the United States, if not the world, that nature has a representation on a board of trustees. And so I'm actually filling that role as the nature guardian right now on that until we can get that up and moving a little bit further along, evolving. But I'm really enjoying that role too, is serving as the nature guardian and looking at how nature can have agency within the operations of the trust and of the entities that the trust owns, in this case Biohabitats.

Matthew (51:21)
Yeah, that must feel like such an amazing responsibility to be a defender in that way.

Keith Bowers (51:27)
Yeah, it's not only an amazing responsibility, it's really interesting to be thinking about the rights of nature, how to give nature agency, how to give species personhood, and what does that mean in terms of the operation of a company, and how do you actually operationalize that in a company. that's been one of my passions over the past 10 months, is really giving that a lot of thought and thinking about how to make that happen.

Matthew (51:54)
Yeah, what an amazing innovation, honestly. And others will be, I mean, I'm sure they already do, but they'll continue to look to you and your all's leadership. So I wanted to certainly praise you for that. Thank you. One of the things you touched on was the sense of stepping away. And so Ted's taking over and it's kind of a relief. I think we find that with a lot of our selling business owners that we're speaking to that that can be a very emotionally charged proposition, the stepping away and the letting go. you, how was that for you?

Keith Bowers (52:22)
There have been moments. Certainly, think, you know, anything that you've sort of birthed and curated for your whole life, when you go to step down, there are certainly things you miss, decisions that you might have made a little bit different, that sort of thing. And so I sort of expected that. of the great, Ted and I have a great rapport. And we actually, when we announced Ted, assuming the role of president, this was almost a year before he took on that role. So it was back in January, February of 2023. So he just took over that role of January 2024. And so we've been working together and Ted's been working with a coach as well. And so we both, think, came to the table recognizing that there are were issues associated with these kinds of transitions. And we wanted to make sure that we did everything in our power ahead of time to help maybe minimize or offset those. And I think we've done a pretty good job, right? I don't feel like I've needed to walk away. Hopefully Ted hasn't felt like he needed to push me away. But there are still times when I sit back and reflect and miss it, right? So, but I also really look forward to the role that I'm in. And as I continue to transition through this, I plan on working full time with biohabitats for the next probably three or four years and then really transition out to part time. But I will say Matthew that I just absolutely love the work that I do. So it's in some ways I'm kind of to push aside all the operations side of the business and really get re-involved in the actual conservation and restoration work that we do for the planet. So that's been really good.

Matthew (54:20)
Yeah, it sounds like what a way to sort of preserve that maybe some of the spark that brought you to the work in the first place that the way you've kind of designed your exit also includes this stewardship role that you have.

Keith Bowers (54:30)
Right, exactly. Yeah, so I think that's really helped and I couldn't just walk away from this. I just love this. I love what I do and to me it's as much a hobby and a passion as it is a sort of career.

Matthew (54:46)
Well, just to move towards sort of our closing thoughts, to put yourself there for a moment into the shoes of maybe a business owner who's thinking about starting to consider the exit of their business, is there any advice you'd like to offer?

Keith Bowers (54:57)
Well, yeah, think, well, for me, it was really thinking through what my personal values are and the legacy I wanted to leave. And for some people, maybe the legacy is I just want to maximize my return on my dollar, my return on my sweat equity over the years, right? In terms of financial gain, everybody's going to be different. So I think taking the time to really think through that process, write it out, talk to people, be really comfortable with how you want that, what you want personally out of that transition and what it means to your employees or your organization. So I think that's really important. And then, you know, don't be afraid to reach out and have people help you through the process. That's also critical.

And I would say it's never too early to be thinking about that, right? I kind of, even though I started this process about seven or eight years ago, I wish I had really started thinking about it 10, 15 years ago, to be honest with you. So I think you can never go wrong by thinking about it too early in your career or too early in your organization's lifespan. So, yeah.

Matthew (56:13)
Yep, well, give it the time and you can end up with as great of a fit of an exit as you've developed Keith. I think that's good incentive for folks to take you up on that. So for our last question, how can our listeners reach you and what would you like to hear from them if they do reach out?

Keith Bowers (56:19)
Thanks.

Yeah, so I think there's a couple of ways that listeners can reach me. is, well, first of all, I would encourage folks that want to find out a little bit more to go on the BioHabitat's website, www.biohabitats.com. There we've got what we call our leaf litter, our quarterly newsletter. We did a whole focus on this process last year.

We also have our blog called Rhizome, which highlights some stories from our transition to a perpetual purpose trust. So certainly use that. People, they want to contact me personally, feel free to [e-mail] and reach out. And I would also be very willing to share some of the resources and people that have helped us out in this whole process. So I want I would love to see other businesses go this route and think seriously about purpose trust, whether it's an employee purpose trust or a perpetual purpose trust or a combination of both. I think, again, it's a different way that we can practice capitalism that's more fair, more equitable, more just. And I would love to help people think about.

Matthew (57:49)
Well, I hope folks do take you up on that offer. again, thank you so much for your time today. I think starting with that quote, you've really shown how you can make the rocks dance.

Keith Bowers (57:58)
Great, thank you Matthew. I really enjoyed this conversation. I appreciate it.

Matthew (58:02)
Thanks so much, Keith. Take care.

Keith Bowers (58:04)
Okay, bye.

Matthew (58:06)
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