<story><title>Venture capital is going to murder Medium</title><url>https://m.signalvnoise.com/venture-capital-is-going-to-murder-medium-656cbccf4829#.tkfbmwfm4</url></story><parent_chain><item><author>leggomylibro</author><text>While I&amp;#x27;ve personally incorporated an LLC for dealing with institutions that don&amp;#x27;t like doing business with individuals, I&amp;#x27;m starting to think that anyone starting a new business should seriously consider making it a Public-benefit Corporation. It lets you define alternative motives for the company besides pure profit, essentially writing the flowery &amp;quot;mission statements&amp;quot; that most companies espouse right into the company charter.&lt;p&gt;It&amp;#x27;s much harder for an activist investor to demand more profits RIGHT NOW if you can point to your charter and say that you&amp;#x27;re focusing on your corporation&amp;#x27;s stated goals - maybe in Medium&amp;#x27;s case, that could be something like &amp;#x27;supporting quality citizen journalism throughout the world.&amp;#x27;&lt;p&gt;I guess that might make your startup less appealing to VC initially, but I&amp;#x27;m sure SV will happily put its money where its idealistic mouth is, right?</text></item></parent_chain><comment><author>mikeyouse</author><text>I don&amp;#x27;t think that would have much of an impact.  The focus on profits from VCs&amp;#x2F;investors isn&amp;#x27;t due to the corporate structure of the company, but the VC Firm&amp;#x27;s internal metrics -- the 10-year fund lifecycle, LP demands, etc.&lt;p&gt;Also the mechanism of leverage isn&amp;#x27;t the fiduciary duty that&amp;#x27;s placed on LLC &amp;#x2F; C-Corp management -- the idea that businesses are legally bound to chase profits is misguided. Company management must act in the best interest of shareholders, but have an incredible amount of leeway when doing so. The leverage from VCs comes from their ownership of significant chunks of the company and board representation. They can replace the management team if they don&amp;#x27;t acquiesce to VC demands. Changing the corporate mission statement won&amp;#x27;t mitigate these problems.</text></comment>
<story><title>Venture capital is going to murder Medium</title><url>https://m.signalvnoise.com/venture-capital-is-going-to-murder-medium-656cbccf4829#.tkfbmwfm4</url></story><parent_chain><item><author>leggomylibro</author><text>While I&amp;#x27;ve personally incorporated an LLC for dealing with institutions that don&amp;#x27;t like doing business with individuals, I&amp;#x27;m starting to think that anyone starting a new business should seriously consider making it a Public-benefit Corporation. It lets you define alternative motives for the company besides pure profit, essentially writing the flowery &amp;quot;mission statements&amp;quot; that most companies espouse right into the company charter.&lt;p&gt;It&amp;#x27;s much harder for an activist investor to demand more profits RIGHT NOW if you can point to your charter and say that you&amp;#x27;re focusing on your corporation&amp;#x27;s stated goals - maybe in Medium&amp;#x27;s case, that could be something like &amp;#x27;supporting quality citizen journalism throughout the world.&amp;#x27;&lt;p&gt;I guess that might make your startup less appealing to VC initially, but I&amp;#x27;m sure SV will happily put its money where its idealistic mouth is, right?</text></item></parent_chain><comment><author>Declanomous</author><text>I&amp;#x27;ve never heard of a public-benefit corporation, but that&amp;#x27;s really interesting. I work in the non-profit sector, and I&amp;#x27;ve noticed a few areas where every non-profit feels like they need help. I&amp;#x27;ve basically automated a way to solve these issues for my organization, and I think it would be cool to use my experience to build a product that other NPOs could use. The structure of the company has been driving me nuts though, because there are a lot of ways the company could be modified to be substantially similar to the one I&amp;#x27;m envisioning, but fail to help. A Public-Benefit Corporation seems like it might be the solution, even if it does make the company less appealing to VC.</text></comment>