The Corporate Law Group

B Corporation Etsy

EtsyEtsy is going public. Etsy helps people sell handmade goods across the globe. It is a so-called B Corporation, a corporation that may legally consider things other than profit. As with many things, B corporations elevate style over substance, but their goals are good. Corporations have always been able to consider things other than profit; satisfied customers, a happy workforce, satisfied vendors, a great climate and economy and good health for all. As Buzz friend Carl Gronberg has said, businesses are no more created to make a profit than people are created to breathe. It’s necessary but it’s not your purpose. Etsy is certified by a group called B Lab. Their prospectus says that B lab is, “An independent nonprofit organization, [that certifies companies] as meeting rigorous standards of social and environmental performance, accountability and transparency. B Lab sets the standards for Certified B Corporation certification and may change those standards over time.” On a score of 80 to 200, Etsy scored 105, lower than Patagonia’s 116 but higher than Ben and Jerry’s 101. Etsy’s prospectus also says that, “If you want to understand Etsy, you’ll have to understand our values,” and goes on to spell out those values as (i) We are a mindful, transparent and humane business, (ii) We plan and build for the long term, (iii) We value craftsmanship in all we make, (iv) We believe fun should be part of everything we do, and (v) We keep it real, always. Good goals for any business. Etsy has done well while doing good, selling $74 million in 2012, $125 million in 2013, and $195 million in 2014. Good growth. Though Etsy’s S-1 makes clear that its use of B Corporation is not a reference to a legal form, there is now actually a form of legal entity in California and many other states called B Corporations. Like Whole Foods, Etsy is run by people who care about their image. Whether legally differentiated B Corporations are a gimmick or not; there’s nothing wrong with that.