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Making a Start-Up a B-Corporation- Why Not?

I'm launching a Clean-Tech Start-Up and strongly inclined to make it a B-Corporation. The nature of our business operations fits well with the B-corporation model, so why not?

19 Replies

Mitra Ardron
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Mitra Ardron Entrepreneur
CEO at Lumeter Networks
There are multiple structures for companies that are trying to create imact, (B-corp, L3C etc) its complex and changing and I last looked at it in detail when we were creating ours 4 years ago. There are multiple issues to consider including whether you want to create the legal structure that allows you to consider other things than just making money, and whether that sends a positive or negative message to the kind of investors you are pitching to.

Apart from legal issues, there is also the certification, I'm not sure if the California Benefit Corporation still requires certification, but note that it can be expensive in both time and potentially money. Also ... for a startup the B-Lab certification is pretty much irrelevant as most of things that get you points are stuff that are either irrelevant (e.g. you get points for recycling all your organic waste even if you could fit it all in a yoghurt pot by the sink !) or stuff you shouldn't be wasting valuable management time on at such an early stage (e.g. a whistleblower policy) or stuff that just doesn't apply (e.g. providing childcare in an organization with no parents). Make sure to get some advice from STARTUP entrepreneurs who have gone down that route.
Gopi Mattel
0
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Gopi Mattel Advisor
Director, Chennai Area at The Founder Institute
I am curious about this as well.
Larry Kutcher
0
0
Larry Kutcher Entrepreneur
Entrepreneur. Business Builder. Operational Leader.
Ultimately, the primary concern of a founder is to make certain that the business succeeds. Therefore, Mitra's points take on added weight - anything that is a distraction or diffuses focus is a potential negative. The perceived benefits need to be verified in the real world and balanced against the financial and resource costs of doing so....

Melissa Skehan
4
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Melissa Skehan Advisor
Passionate, Mission Driven, Strategy, Growth & Impact Leader - Founder, CEO, President, Executive Management
I agree with the general comments above, but with a different spin. My company was a B Corp (B Certified through B Lab, not in legal structure as a Benefit Corporation). This is an important distinction. At the time, I found the certification process rigorous but meaningful. It provided important framework for an aspect of our business that was important to us (our team), to me as a founder, to our clients, to our investors etc. I do think its important that this be true for you as you contemplate. If you are doing it only to get the "badge", it could be a distraction. That said, there are many benefits thatcan be explored.For example, Ialso found the community of fellow entrepreneurs, the quality of the talent pool (employees and professional services), the commitment of the investors etc to be top notch amongst this community and therefore a benefit. If it makes sense for your business, I think its a worthyendeavor, and one that is increasingly becoming more recognizable and therefore important. If you have to struggle to make it fit, its not likely right for you.
Richard Reed
1
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Richard Reed Entrepreneur • Advisor
Director of Marketing at Labdoor
I highly recommend contacting John Montgomery if you want to discuss the merits of a B corp. He is becoming a though leader in the space as he has practiced corporate law in SV for 20+ years and is now a big advocate of B corps. Here is his site:http://mh-llp.com/our-people/john-montgomery
Heath Shackleford
1
1
Heath Shackleford Entrepreneur
Founder/Kick Starter at Good.Must.Grow.
Scott, as a B Corp founder I'd be happy to share pros, cons, etc. Let me know how to reach you and I'd be happy to connect.
Michelle Hoexum
1
0
Michelle Hoexum Entrepreneur
principal at propeller
I would agree with Melissa. Certification is different than how you are incorporated. If you truly want to be focused on the triple bottom line of people, profit, planet the BCorp certification process is an excellent framework for creating this culture. There is also a quick assessment to highlight areas that might be a challenge. Do you have a Local First chapter near you? They are excellent resources. Feel free to contact me directly if you would like to discuss more in detail.
W. Scott Hoppe
0
0
W. Scott Hoppe Entrepreneur
CEO at Sabreez, llc
We do have a growing B corporation community here in Richmond, and local investor interest is growing for triple bottom line investing.
Heath Shackleford
1
0
Heath Shackleford Entrepreneur
Founder/Kick Starter at Good.Must.Grow.
Anyone who says B Lab certification or the B Corp movement is irrelevant will quickly be proven wrong, in my humble opinion. According to our research, the majority of consumers are seeking products and services that are offered from "do good" companies. We're not so far off from the B Corp seal of approval being a widely recognized and accepted mark of excellence. There are other ways to prove you are doing business in a good way, but this is a really great way to go. Anyone who suggests it is too rigorous or costly for a startup hasn't gone through the process. It wasn't easy, but it was by no means a burden. Unless, as noted above, it's really not a "good business" you're creating in the first place. Don't mean to come across defensive, but the social enterprise movement is close to home for me, and the future if I had to place a bet.
Joseph Wang
1
0
Joseph Wang Entrepreneur
Chief Science Officer at Bitquant Research Laboratories
It's generally a bad idea to do anything new and original when it comes to corporate structures. If you have a standard garden variety corporate structure then when you have to do something with it, you use the standard operating procedure to deal with it. If you are doing something new and original you might have to do something weird and expensive when something comes up.

I see no possible benefit other than marketing and networking, and there are easier and better ways of doing marketing and networking than to mess with corporate structures.
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