Case Study:
Thankyou Payroll

Thankyou Payroll is a SAAS Payroll intermediary established in 2009. Hugh Evans and Kate Stevens West founded the company to provide high-quality payroll services to charities and SMEs, leveraging government subsidies to keep costs low. At inception, it filled a unique gap in the market and saw growth of 400%+ year on year. It now serves around 7500 organisations with a staff of 25.

In 2023, Thankyou Payroll completed its ‘exit to steward ownership’ process, buying back shares from almost 200 shareholders and transferring ownership to the Generous Ventures trust. The company expects substantial dividend returns to invest in community outcomes in the coming years.

In 2019, Hugh stepped down from his role as CTO and the TYP Board to be a full-time parent. During lockdown, he researched to find a process and a model to liquidate his shareholding, ensure that both the boot-strap investors and the Pledgeme equity funders could be bought out, and achieve the goal of the charitable trust buying back the organisation.

In 2021, an operational restructure came into play. David Morrison was appointed CEO, and Hugh rejoined the board. “After the TYP restructure, the exit was deprioritised, as we embedded a new leadership team. Progress was further complicated by macroeconomic factors, which meant that the banks were no longer falling over themselves to help.”

Nevertheless, progress continued; TYP and MinterEllison partnered to develop a legal structure and framework that would fit the board’s aspirations. Other benefits were uncovered, including tax benefits for shareholders created by the lack of capital gains tax in New Zealand, and benefits to the company due to the charitable nature of the purchaser. 

After three years of discussion and work, in November 2023, an overwhelming majority of shareholders, representing 99.8% of the ~200 shareholders voted in favour, and Thankyou Payroll became the first organisation in Aotearoa New Zealand to exit to a Perpetual Fund via investor buyout, stewarded by Generous Ventures, the entity nominated to hold the shares moving forward.

Since the exit, positivity has built the culture. “Everyone understands the strategy, values, and goals of the business. It’s clear to see the aim, and employees can feel that. Storytelling has been an important part of the exit. Employees and Board members directly understand what they’re contributing to.”

Hugh hopes that Thankyou Payroll is the first of many such transitions in Aotearoa. “The exit process was challenging for us because we were the first. I hope our work paves the way for other businesses to become community-owned faster and more efficiently.  We’ve worked through the legal and structural challenges and created pathways for others to follow as they explore their own business needs and potential.” 

Hugh further reflects on the need for a driving force to champion an unconventional exit from the inside. “Exits of all kinds are challenging and risky, but an exit to steward ownership holds the potential for both financial and social ROI, making it a worthwhile option to explore.”

Tammy Chee, Chair of Thank you Payroll agrees: “Exiting to community ownership represents a bold and inspiring step forward for businesses seeking to align profit with purpose. For us, this transition has not only preserved our mission but has also empowered our team and community. It’s a testament to what can be achieved when values lead the way. We are excited to see the ripple effects of this and hope to inspire others to consider similar paths that benefit both their organisations and the wider community.”