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The "B" in B Corp doesn't stand for "business." And it most certainly doesn't stand for "bank." It stands for "benefit," as in public benefit corporation, and it means the company is as committed to social change, charity, or serving the public interest as it is to making money.
Kickstarter could've taken the path chosen by a majority of tech startups and angled for a sale, acquisition, or IPO. Instead, the online fundraiser stuck to its altruistic guns and became a B Corp.
Business in the Public Interest
In a PR email, Kickstarter reaffirmed its commitment to "serving artists, creators, and audiences to help bring creative projects to life," saying its "new status as a Benefit Corporation hard-codes that mission at the deepest level possible to guide us, and future leaders of Kickstarter." And they're not kidding about the hard-coding part: Becoming a public benefit corporation means writing your altruistic mission into your articles of incorporation, where it becomes not just an ideal but legally binding.
Kickstarter also posted its charter online, noting its new obligation "to consider the impact of their decisions on society, not only shareholders." And this is an important point to note: in most corporations, directors have a legal duty to act in the shareholders' best interests; but B Corps are legally bound to consider the public interest as well.
Not Just a Public Benefit
While altruism is certainly on the mind of Kickstarter and other companies that could to become B Corps, there are benefits for the company as well. Incorporating as a benefit corporation means more limited liability for directors and more attractiveness for private investment capital and retail investors.
Not to mention the good publicity from announcing your public service intentions. With more employees and investors looking for good over greed, making the public benefit your corporate mission can attract talent, money, and good vibes.
If you're thinking about following Kickstarter's lead and changing your business structure to a public benefit corporation, start by contacting an experienced business organization attorney.
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