Kickstarter has always been very public about their desire to not ever go public as an organization. They’re also not looking to cash out on the successes they’ve experienced since their founding. Since 2013, Kickstarter has been looking at the idea of becoming a Public Benefit Corporation [PBC]. Last year, when the company became a certified B Corp, the idea was to become a PBC soon after.
That has become a reality as of September 2015. With this move, Kickstarter can now act on some of their long-held beliefs that wouldn’t necessarily be possible if they were a more traditional corporation in their structure.
Only 1,200 Companies Have Registered As a B Corp In the US
The B Corp structure is something that is relatively new for US organizations. 30+ states allow this structure and it is pending in a handful of other states, but it isn’t everywhere. The number of registered B Crops is also only around 1,200, giving Kickstarter some unique company right now.
A B Corp is still a for-profit corporate business. To obtain this status, however, they must be making some sort of positive impact on society and/or the environment in addition to their ability to pull in a profit. The advantage isn’t in taxation. Being a PBC means changes in purpose, transparency, and accountability when compared to the traditional corporation.
The primary difference in a B Corp is how the stakeholders are treated. Traditional corporations must make an effort to maximize the financial gain for its shareholders. In a B Corp, there must also be a responsibility to consider non-financial stakeholders in the business as well as their shareholders.
Kickstarter spent almost all of 2015 defining the process of benefits that it could provide. With only 30 shareholders, the transition was transparent and informed. Everyone was on board with the idea that the company should seek to maximize their impact rather than maximize their profit.
To further that impact, Kickstarter has also made a commitment to donate 5% of post-tax profits to educational opportunities, arts education, and groups that are fighting to end inequality.
Values Are At the Core of Every Business
It would be incorrect to say that a B Corp has better values than a traditional organization. Every company has a mission to improve the community around it in some way. The difference in the PBC is that the missions that are not financially related hold an equal importance to profitability. In the traditional structure, profitability will always come first.
This means if there is a situation where values where to go head-to-head with profitability, the traditional organizational model would require those with equity in the company to approve of any social measures before the company could proceed.
For Kickstarter, this is just one reason why becoming a PBC was an easy decision. They were already a business that was working toward social missions. The goal of rising up new entrepreneurs and helping others successfully fund their ideas is an integral component of what Kickstarter does every day. If they became a public company or allowed themselves to be purchased, there was no guarantee that the mission could stay the same.
It doesn’t make sense to try to fix something that isn’t really broken. Becoming a B Corp is a natural extension of what Kickstarter does. It shouldn’t change and now thanks to this move, what we see today will continue into the future for this organization. Entrepreneurs are going to continue be able helping other entrepreneurs build up new ideas from scratch.
So what should we expect from Kickstarter in the months and years to come? An evolution of more of what we are already seeing. The company has eased its restrictions on what campaigns are allowed on its platform – remember the better potato salad success? More companies are going to approach Kickstarter as a way to test their market or raise money to expand services – think Reading Rainbow. Then there will be leaps in tech innovation that the market embraces with companies like Pebble leading the way.
Values can be a core component of a for-profit organization. In the future, it isn’t crazy to believe that all organizations could place a greater social, local, and environmental emphasis to their overall mission to help their company grow.
Kickstarter plans on joining 1,200 others as a PBC to lead the way on this new journey. For the rest of us, it’s time to sit back and enjoy the ride for awhile.
Strong proponent of individual liberty and free speech. My goal is to present information that expands our awareness of crucial issues and exposes the manufactured illusion of freedom that we are sold in America. Question everything because nothing is what it seems.