B Lab, the nonprofit responsible for the passage of benefit corporation statutes in over 30 states (as of the writing of this post), has released a report on the status of venture capital raised by benefit corporations. While skepticism remains among the entrepreneurial and investors communities around the ability of benefit corporations to raise traditional venture capital, it appears that benefit corporations are able to break into the venture capital ecosystem, including at some of the nation's top venture capital firms.
As B Lab says in the report:
The venture capital community has led the charge by supporting benefit corporation entrepreneurs. More and more, we’re seeing entrepreneurs chose to become benefit corporations and proceeding to do large-scale successful capital raises from traditional investors.
According to the report, notable companies that have received venture capital include:
- Alter Eco (fair trade food products): $3.05M
- AltSchool (education): $133M
- Cotopaxi (outdoor gear and apparel): $9.5M
- Ello (social network): $10.94M
- Farmigo (farm-to-table): $26M
- Yerdle (online resale marketplace): $5.5M
According to the report, notable venture capital firms that have invested in benefit corporations include: Andreessen Horowitz, Baseline Ventures, Benchmark, Greycroft Partners, New Enterprise Associates, and Omidyar Network.
What is a Benefit Corporation?
A benefit corporation is a legal structure that requires a corporation to balance shareholder interests against societal and environmental considerations.
