B Corporations

I see http://www.bcorporation.net/ as an interesting initiative: B (Benefit) Corporations take employee, community, and environmental interests into consideration when making decisions; their legal structure expands corporate accountability so they are required to make decisions that are good for society, not just their shareholders. One tagline is “Using the power of business to solve social and environmental problems.” Sounds worthy to me. There is an assessment and certification process.

I have been thinking whether a B Corp can at the same time be an Upstarta, as there does appear to be a large overlap in objectives and approach.

Some B Corps do take on venture capital, which I consider tricky – but on the other hand, the VC firm understands and is also subject to the B Corp’s legal framework, so contrary to “regular” companies the VC funding does not necessarily mess with the business trajectory: the “right” process fundamentals are already in place. However, that still depends on the desired return-on-investment and timeline that a VC wants. Are they fully on board with the B Corp’s objectives, or do they reckon that fast growth is a required fact of life and it’ll happen anyway, so they can get their investment back xN within M years?

The latter, because of the xN, generally requires sale of the company or floating on the stock market. Are there alternatives to those known trajectories? Could a non-profit survive as a public company or as part of another corporation? These things are probably quite untested (please prove me wrong, if you have examples!) and so I just don’t know. I’m interested, yet concerned.

There is a topical case to consider: CouchSurfing.org, a non-profit, has just become a B Corp and they have also taken on some VC funding as part of this change. It will allow them to do more, but will it also work out well for the organisation and its users in the long term?

Your thoughts and opinions welcome!

One thought on “B Corporations”

  1. On my quick reading I don’t see any reason a B Corporation couldn’t be an Upstarta in terms of violating any of the 10 principles

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