Making the impossible possible: How companies can go public without losing their souls

bcorpAre B-Corp and public company interests compatible?

“If Chouinard ‘never wants to go public,’ then, registering as a B-Corp is not going to help him. But I suspect the idea here is that by registering as a B-Corp, Chouinard is creating a company which can go public without losing its soul.” – Felix Salmon

It is typically regarded that public companies and social enterprises have two conflicting, incompatible missions. While public companies seek to benefit their shareholders, social enterprises seek to benefit all stakeholders involved. Rather than solely focusing on company growth and profits, social enterprises seek to live out their social and/or environmental missions through business operations. It’s no wonder, then, that social enterprises are oftentimes regarded as more socially responsible business structures than traditional for-profits and public companies. Many social enterprises, as a result of negative connotations associated with public companies, disregard any possibility of going public in order to raise necessary funds. That being said, the benefit corporation election allows social enterprises to consider a public offering without losing focus on the social mission.


The idea behind B-Corps is simple: it allows a corporation to have public shareholders, dividends, and stock offerings, while not having to focus solely on maximizing shareholder value. In order to become a B-Corporation, a company is required to meet environmental and social-responsibility standards, all of which get reported annually.

According to Felix Salmon, a Reuters analyst, B-Corps “have the potential to rewire one of the most dangerous things about being a public company today – the requirement to keep growing, no matter what.” Rather than constant concern with short-term gain and success, the B-Corp designation allows corporations to also focus on stakeholders without a direct financial interest.become-a-b-corp-header

And, the B-Corps movement is gaining momentum. According to David Gelles’ Interest in SocialMission Gains Ground Among Small Companies article, there are “more than 1,000 B Corps spread across 33 countries”. And this number, much like the B Corporations themselves, is growing everyday.


BTC-SM-PatagoniaIn 2011, Patagonia restructured itself to form a benefit corporation, under the leadership of CFO turned COO turned CEO Rose Marcario. Since Marcario’s arrival, the company’s growth rate has been 14%, profits have more than tripled, and the company is currently looking at having its most profitable year in its history, with sales projected to reach $750 million. The transition into a B Corp was in keeping with Patagnoia’s belief that there is more to being a successful company than maximizing profits, as well as strengthening their efforts to be environmentally friendly. Since becoming a B Corp, Marcario and Patagonia have shared their experiences and resources with other companies. R
ecent B Corp businesses that Patagonia has helped cultivate include Warby Parker, Ben & Jerry’s, Klean Kanteen, New Belgium, and Method. (Bradley, Fortune article, Sept. 2015)

Notable companies such as Kickstarter and Etsy are also B Corporations. The former said no to an IPO while the latter IPO’d in April 2015.

Kickstarter CEO, Yancey Strickler, told the New York Times, “‘we don’t ever want to sell or go public. That would push the company to make choices that we don’t think are in the best interest of the company.'” (Chang, Digital Trends article, Sept. 2015)

On the other hand, Etsy CEO Chad Dickerson saw the road to a public company as one involving more business discipline AND more transparency. (Etsy News Blog, April 16, 2015)

As we’ve grown, Etsy has become a touchpoint of debate for larger issues, including whether the human-centered craftsmanship that we exist to support is compatible with being a public company, which requires a new set of responsibilities to shareholders. We understand the concern, but reject the premise that there is a choice to make between the two. Etsy’s strength as a business and community comes from its uniqueness in the world and we intend to preserve it. We don’t believe that people and profit are mutually exclusive.

We believe that Etsy can be a model for other public companies by operating a values-driven and human-centered business while benefiting people. Financial success is important for the company, because that is what allows us to reinvest in our platform and grow our business sustainably — just like the businesses who have a home on Etsy. When our sellers succeed, our business succeeds, which leads to value for our shareholders. That will be our enduring philosophy and we are committed to running our business in a responsible way that combines our vision with strong execution and discipline, and with faithfulness to our values and conviction.

EtsyWith growing difficulty and competition surrounding raising funds for social enterprises, and IPOs can be a beneficial and feasible alternative. What are your thoughts? Is an IPO just profit or unjust profiteering? Let Irish Impact know!

Thanks to former social entrepreneurship student, Molly Anzelc, ND ’15, and Irish Impact intern, Mary Patano, ND ’17, for their research contributions to this blog post.

Salmon, Felix. “The Promise of B-corps.” Reuters, Analyst and Opinion, 1 May 2012. Web. 12 Oct. 2014.

Dickerson, Chad. “Etsy’s Next Chapter: Reimagining Commerce as a Public Company.” Etsy News Blog, 16 April 2015. Web. 15 Dec. 2015.

Gelles, David. “Interest in Social Mission Gains Ground Among Small Companies.” The New York Times, 23 April 2015. Web. 16 Oct. 2015.

Bradley, Ryan. “The Woman Driving Patagonia to Be (even More) Radical.” Fortune, 14 Sept. 2015. Web. 16 Oct. 2015.

Chang, Lulu. “Good Guy Kickstarter Says No to IPO, Becomes a Public Benefit Corporation Instead.” Digital Trends, 21 Sept. 2015. Web. 15 Dec. 2015.

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