Kickstarter, a popular crowdsource company that helps new inventors raise money to fund their creative projects, recently announced they are becoming a Benefit Corporation. While many of us may not know what this means, the move by Kickstarter is becoming more popular. Here is what you need to know.
Benefit Corporation defined
A Benefit Corporation voluntarily meets standards of corporate purpose, accountability, and transparency.
How is this different?
When a traditional company takes actions that do not maximize their value, they can be vulnerable to owner lawsuits. To solve this problem, some states allow companies to legally organize themselves as B-Corps or Benefit Corporations. The B-Corp formation provides the company legal protection from shareholders while pursuing a social mission. This social mission is made public. Here are some examples;
|Patagonia (outdoor gear): Commitment to the environment|
|King Arthur Flour (baked goods and flour): Sustainable living environment; ending child hunger|
|Ben and Jerry (ice cream): Advance new models of social justice that are sustainable and replicable|
|Kickstarter: Commitment to arts and culture
Click here to see the Benefit Corporation Charter of Kickstarter
Other things to note
|Benefit Corporations can be private OR publicly owned.|
|The profits may or may not be as high as a typically organized corporation.|
|Benefit Corporations often give part of their profits to a worthy cause.|
While an investment in a B-Corp may not be profit maximizing, you may feel a little better about where you put your money. As with any investment, please understand your risks and ask for help before investing.