Public Benefit Corporations are Going Public
Tuesday, March 2, 2021
As society increasingly expects corporations, large and small, to generate positive social impact alongside profits, many entrepreneurs and executives are incorporating their companies as, or converting to, Public Benefit Corporations (“PBCs”). As discussed in our articles for
VC Experts—“Can I Raise Venture Capital as a PBC?” and “What are My Exit Options as a PBC?”—a PBC is a legal corporate form created by the state of Delaware in 2013 that, among other things, codifies a company’s social mission. Most significantly, a PBC allows a board of directors to make business decisions based not just on the economic interest of the corporation’s shareholders (as required by the traditional C-Corporation corporate form), but based also on the PBC’s mission, which may focus on the interests of those materially affected by the corporation’s conduct, including employees, customers, communities and the environment. With early-stage investors onboard with the PBC corporate form, the public markets are following suit. PBCs are now successfully going public with IPOs; a public C-Corporation converted to a PBC for the first time last month; and a PBC going public via a SPAC for the first time is just a matter of when, not if.