Posted on January 24th, 2017
Posted on October 26th, 2016
Each side makes a good point. If companies are ruled only by slow moving legislation and potential failure, we might see some ugly scandals arise after the money has been counted. On the other hand, if companies are forced to operate in a sphere they have no expertise or desire to operate in, it could be a big waste of money, counterproductive efforts and its own breed of scandal.
Retrofitting or New Construction?
Easier said than done. While this may sound deflating, changing how business owners see the role of a corporation is a big task. Altering big corporations to fit this model is a tough sell to investors and logistically challenging. But creating an organization specifically for increasing a public benefit can bypass potential landmines that plague traditional organizations. This is where Benefit corporations and B Corps come in. Entrepreneurs who wish to take this concept of top to bottom consideration on impact and put it into action today can start a benefit corporation or B Corp to take advantage of outward facing features.
Note: A benefit corporation and a B Corp share similar goals, but their main distinction is that a benefit corporation is a legal designation and a B Corp is a designation given by a non-profit organization B Labs as a third party. A company can be both, if they choose. We will refer to this new business structure as a benefit corporation, from here on out.
There are several issues with the implementation of an honest CSR strategy that are less prevalent in benefit corporations. The issues include: the need to maximize profit, disingenuous programs, and the volatility of commitment. A benefit corporation has the ability to focus on goals that impact the community and the world, without betraying the trust of investors or putting on a false face to the public. Traditional corporations should pursue their primary purpose, which is to make a valuable product that’s trustworthy. This isn’t to say that companies should have a total disregard for their impact on the world, but they shouldn’t use CSR as a cover. Perhaps, for traditional corporations this means a new mindset for corporate leaders and the investors they serve. If engaging with society is as valuable as Lord Browne suggests, this change might come in the future. Entrepreneurs and investors that would like to embed positive engagement with society into their company’s DNA right now, can can look to benefit corporations. How can benefit corporation status be better suited for a business interested in doing good?
A benefit corporation can include impact in their business plan and stay honest through reporting requirements. These types of corporations have the pursuit of public benefits protected by law. Benefit corporation status expands the set of stakeholders to be considered in decision making. There’s now a good opportunity for entrepreneurs who wish to fully commit to corporate responsibility.
Posted on July 13th, 2016
Essentially, these small businesses will gain an important advantage with less time wasted on navigating a corporate structure.
Posted on June 17th, 2016
Equity Crowdfunding and Benefit Corporations: Upsides and Downsides
On May 16th 2016, the Securities and Exchange Commission (SEC) began allowing startups to offer equity through crowdfunding campaigns on platforms like IndieGogo and Crowdfunder. The 2012 Jumpstart Our Business Startups Act (JOBS Act) originally created this allowance and it has taken the SEC four years to complete its rulemaking obligations. The JOBS Act aims at encouraging investment in small businesses by easing restrictions on who can become an investor. The key provision of the bill allows equity crowdfunding. Since this form of investing is new, there are many issues to consider.
The SEC defines crowdfunding as “a financing method in which money is raised through soliciting relatively small individual investments or contributions from a large number of people." In the past, investment has been reserved for wealthy “angel investors" and venture capitalists. Now the general public can invest in these early-stage startups, in a limited way, through equity crowdfunding.
Crowdfunding itself is not a new concept. Donation crowdfunding is how many charities and nonprofits raise funds. Another familiar crowdfunding option is reward-based crowdfunding. This version promises backers a product or service for their money, with the understanding that the funded party will use the money raised to create the product or service. Kickstarter and Indiegogo are well known examples of this type of funding. In contrast, equity crowdfunding allows even non-accredited investors to become venture capitalists. Their reward is not funding a good cause or receiving a new creative product, but owning a share of the company itself. This investment can be risky, which is why the SEC has imposed strict guidelines on how much parties can invest.
The table below shows how much an investor may invest in a 12-month period. Someone with a $30,000 income and net worth of $105,000 can only invest $2000 or 5% of $30,000, whichever amount is greater. An income of $1.2 million allows investment up to $120,000. A company seeking funding is limited to raising $1,000,000 from crowdfunding over a 12-month period.
Types of Crowdfunding
There are a variety of investing structures.
Loan/Debt – When investors choose this type of investment, they are giving money to the organization as a loan. Just like any other loan, the investors receive interest on the loan at regular intervals within a time frame that is restricted. For companies, this investment type is attractive because of its similarity to a bank loan. Banks might not want to issue loans to risky prospects, so crowdfunding provides an opportunity to raise funds without issuing stock. Another advantage is that interest rates are more favorable and competitive compared to bank loans.
Convertible Notes – These types of notes are popular with startups. Convertible notes are structured like a loan but instead of paying interest, the startups grant equity to the investor after certain milestones or criteria is met. This modality is intended to delay valuation of early-stage companies and to provide investors with some safety measures and rewards for their risky early investment.
Direct Equity – There are also options to purchase both common and preferred stock (a/k/a partial ownership) in a company via crowdfunding. Preferred shares usually come with additional bonuses like guaranteed dividends or more shareholder voting power. Usually, preferred shares also have a more stable rate of return and are rated in a fashion similar to an investments such as bonds. Preferred shares are favored by investors in crowdfunding and in startups in general.
Prospectus and Disclosure
SEC Rules and Warnings – The SEC states that a company seeking crowdfunding investments “must disclose information about the company, its business plan, the offering, and its anticipated use of proceeds, among other things." This information is limited compared to a publicly traded company because an early stage start-up is a new entity. It does not have the history to prove its business plan. Even if the business plan is viable, the personnel might be unable to execute it. The guide goes on to mention that the “company is also only obligated to file information annually regarding its business, including financial statements," which is different from a publicly traded company that must file quarterly.
As mentioned before, new companies often have untested business models and personnel. A major risk is being unable to determine where the company is raising enough money for its business plan. Some crowdfunding platforms have goals. Others allow investors and companies to connect for direct investment. How can investors know that the amount requested is enough?
This subject is tricky because of the variety of crowdfunding approaches available. Some offer investments in the form of a convertible note structured like a loan, while others offer preferred stock. Some vet companies that fit a certain profile. Others require companies to convince a lead investor to start a campaign. Some sites guide the process along, asking for information investors need to vet a company themselves. Some have requirements such as proof of revenue, proof of concept, or other assurances while others require less.
While these platforms wish to offer some measure of security to investors and companies, their measures are not standardized. Nor should they be. These sites are trying to develop an effective way to provide access to sound investments in an arena filled with risk. The platforms should be allowed to experiment their way to success or failure. So, in the end, each crowdfunding platform is different; and each platform requires the investor and the company to understand what they are getting into.
The JOBS Act aims to create an environment for startups to thrive. A larger investor pool, especially one that can spread out risk by design, may encourage investment beyond the highly attractive tech industry. This pool helps small and medium sized businesses. It also can be a boon to benefit corporations by encouraging smaller investors, passionate about a social purpose, to back their projects, creating a pool of investors similar to funders found in donation crowdfunding. The ease of online platforms to manage and gather this pool of investors is also a key feature of equity crowdfunding. The three factors listed below represent a few important upsides to the crowdfunding concept.
Upside: The Little Guys
Upside: The E-factor
Gathering large groups of people online is easy. When it comes to finding investors, this unique way of organizing lots of people is useful. For a small or medium company that is not in a sexy industry, it can be easier to find a thousand people to invest a small amount or more than to solicit targeted VCs to invest a substantial amount. The online nature of crowdfunding makes the process easier for investors and companies hoping to be funded.
Another upside is the real time nature of crowdfunding online. Potential investors can hear a pitch and provide instant feedback through actual investments or social media. Kickstarter campaigns have included stretch goals that expanded the product’s capabilities beyond the initial iteration. These new capabilities often can be a feature requested by the community during the campaign. One of the risks that comes with starting a company or launching a product is determining whether a market exists for it. A well-publicized campaign can go viral, blow past funding goals, and prove the concept is viable, with real people putting up real money.
Upside: Social investing
Some investors may wish to invest in companies for a social return, rather than a financial one. So, if a benefit corporation wishes to focus more on its mission than on return, crowdfunding provides a way for these investors to support this approach with a smaller commitment. The platforms allow socially conscious investment in much needed products or in companies that plan to do good with their profits. Since risk is spread out among a field of investors because of SEC limits, these investors can direct their funds to multiple companies, encouraging diversification, thereby allowing more companies to be included in a portfolio.
The possibility of a return on a socially beneficial investment could increase funding or allow reinvestment as well.
No platform is perfect. A relaxation in regulations means that there is potential for abuse and fraud. These platforms represent an entirely new field of uncharted loopholes and overlooked exploits. The older system has its own problems too, after all. The risks of this new form of investment should be seriously considered by both potential investors and the general public.
fraud occurs when:
Fraud can go both ways. According to a report by Prof. Ethan Mollick of the University of Pennsylvania, project backers on Kickstarter, “should expect a failure rate of around 1-in-10 projects, and to receive a refund 13% of the time. Since failure can happen to anyone, creators need to consider, and plan for, the ways in which they will work with backers in the event a project fails, keeping lines of communication open and explaining how the money was spent. Ultimately, there does not seem to be a systematic problem associated with failure (or fraud) on Kickstarter, and the vast majority of projects do seem to deliver."
While this low rate of fraud is good news, it only applies to Kickstarter. This company is well known or respected and takes project policing seriously. The more platforms that exist, the more opportunities there are for people to commit fraud.
While it is too early to see many examples of fraud in the crowdfunding arena, it is important to keep the risks of making such an investment in mind. The first case of equity crowdfunding fraud was filed against the oil and gas company Ascenergy. The company had been using portions of the JOBS Act that went into effect before May 16th. The commission reported that the company had already spent “at least $1.2 million of the offering proceeds, but only a few thousand dollars appear to have been used for oil and gas-related expenses. Instead, a significant part of the $1.2 million has been spent on payments to Galbadon or companies he controls, or for expenses unrelated to the oil & gas business, including, by way of example, foreign travel, fast food restaurants, Apple stores and iTunes, dietary supplements, and personal care products." This case signals what could go wrong with an investment. This fraud, happening so early in the history of equity crowdfunding, should send a signal to platforms that self-policing should be a high priority.
“A similar system could be used to funnel money out of the country to fund terrorism. If fifty fake investors crowdfund a sham company that purports to do charitable work abroad, the investors could transfer funds to the company by purchasing (worthless) equity, and the company could transfer the money abroad under the guise of its business."
The Bank Secrecy Act requires all financial institutions to help stop money laundering by putting in place an Anti Money Laundering program. The idea is that financial institutions will have a better understanding of what seems like fraud than the regulatory body would because they’re much closer to the problem and have specialized experience.
The funding portal is required to do a few things to ensure all transactions are legal. The first is to collect information about an investor, issuer and key personnel of the company and 20% of the shareholders. The second is to report known or suspected illegal activity. Lastly, there must also be a system for complying with requests from authorities.
Failure Rate – Compared to public companies, the unproven nature of startups make them a very risky investment.
Liquidity – Investors are prohibited from selling their shares for 12 months. After that, they have to find interested buyers themselves. There is no public listing for private stocks, so they will have to make connections themselves.
Limited Disclosure – Mentioned above under: Prospectus and Disclosure
Guidance – Venture capital firms and other early-stage investors may invest in a business for its potential and then offer guidance for the Board of Directors or act as mentors to personnel. They lend their experience to improve the likelihood of success. This involvement is not present when one invests through crowdfunding because the type of equity offered and the total amount invested.
Vetting – Zachary Robock’s paper mentions that “The JOBS Act requires that funding portals take measures to reduce the risk of fraud, including obtaining a ‘background and securities enforcement regulatory history check’ on the issuer, its directors, officers, and 20% or more shareholders, as well as any other measures a funding portal deems appropriate." There is regulation that requires vetting, but there are other factors in vetting beyond fraud. Crowdfunding platforms want to ensure that investors make money and companies can interact with interested investors. Each platform has its own policies in place to ensure good investments are made. However, much of the vetting devolves upon investors. The limited disclosure, untested personnel, unproven business model, and other risks all contribute to the difficulty in vetting companies. Some platforms, such as 1000 Angels, take vetting very seriously and use it to market their platform. 1000 Angels claims, “less than 1% of applicants to the platform are selected as featured investment opportunities." There are also platforms that verify a minimum of information and connect investors with companies directly. Still, others help companies understand the right metrics and milestones for crafting an attractive campaign.
Posted on June 6th, 2016
If you don't feel you are really getting the full benefit of your smartphone or tablet right now, then the Useful Apps Club might be for you," explains Dr.Richard G. Caro, co-founder of Tech-enhanced Life. "We're also catering to people who don't have a mobile device but have toyed with the idea of acquiring one. Many would-be buyers worry that the learning curve of a smartphone is too steep to justify the cost.
Posted on May 27th, 2016
Welcome to the very first IBPE Session exploring benefit corporations. In these sessions, we’ll be talking with thought leaders and innovators in the benefit corporation movement.
Our guest, Michael Pirron, is the CEO and founder of Impact Makers a competitive social enterprise firm and one of today’s fastest growing companies. We’re going to be discussing the unique characteristics of his firm, specifically the firm’s decision to reincorporate as a benefit corporation, and then some of the cutting edge financial methods he’s adopted to ramp up this social enterprise.
Prof. Daryl Koehn, Ph.D is the Wicklander Chair of Business Ethics and creator of the Benefit Corporation Gateway, an online resource that creates and collects information about benefit corporations so entrepreneurs, academics and the public can gain a complete perspective on this new and growing business type.
Daryl Koehn: Can you tell us a little about your business?
Michael Pirron: Let me start by giving a 10-second explanation. We are the Newman’s Own of IT consulting. We’re a for-profit company, where all profits go to the charity over the life of the company. And in fact all of our common stock is held by two public charities. So if we’re ever sold, all proceeds of that sale go to charitable organizations in the communities where we do business.
DK: How did you get the idea to found a company like this?
I said we’re the Newman’s Own of IT consulting for a reason. I went to the University of Virginia, as an undergraduate to get a business degree, but also a minor in sociology. [Laughs] Which is an interesting combination.
I was fascinated when we were assigned a Harvard business case on Newman’s Own. I found that really interesting, a really interesting combination of sociology and business together. And after I graduated from UVA’s business school and went to work with Andersen Consulting, which is now Accenture, and that case really stuck with me.
And I was very interested in that whole concept and didn’t realize there was a term for it called social enterprise. I continued to think about it and at the same time had this really interesting international career with Andersen Consulting. I was based in southern France and I was sent on projects all over Europe, the Middle East, India, Africa and found myself in South Africa during Mandela’s election, and various other places.
I realized I liked the work, I was good at the work, but the clients I worked with weren’t really values-aligned. And I also looked at the partners that I was working for, wonderful people, but I just didn’t want to be them. The culture of the company at Accenture, as a great of a company as it is, it was really a culture of money and alcohol. [Laughs] And that just wasn’t where I wanted to be long-term.
Newman’s Own is a business to consumer B to C and it’s a product. What I know is services and B to B. But what if you can build a Newman’s Own on an IT consulting framework? Because that’s what I knew. When I went to Northwestern’s Kellogg School of Management to get my MBA I actually wrote a paper on that concept of creating a Newman’s Own-modeled consulting firm. That’s where it continued to resonate with me over the years after I wrote that paper.
DK: Let me just make sure that our listeners and our readers understand: you are a for-profit company. You do not run a not-for-profit company. You’re a competitive company, but you choose to give your profits to select nonprofit partners. Is that right?
PIRRON: Yes, that’s right. We are…So, [Laughs] we, absolutely, we’re a for-profit company governed by a volunteer board of directors. The company gives and our board of directors chooses charitable partners. They have to be secular, apolitical, 501(c)(3), local, and helping people help themselves. Within that framework. The board also sets executive compensation, talks, approves major capital expenditures, et cetera, and represents community interests, right? So that’s kind of what the board does. In every way we’re a for-profit company doing IT and management consulting with about 20% state government and 65% healthcare industry, and then other for-profit entities. We do work not unlike the Accentures, the Deloittes, the PWCs. We’re competing with them.
DK: What are your revenues today?
PIRRON: We ended 2015 at $17.8 million and we just had our first $2 million month in February.
DK: Oh, congratulations! That’s fabulous.
PIRRON: Yes. So, it was me and a laptop in 2006 when I started it, and we’ve grown organically every year and have been in Inc. 500 four years, Inc. 500/5000 four years in a row. We’ll probably make it a fifth year.
DK: What’s your annualized revenue growth? If you look back at that period, roughly what have you been growing per year?
PIRRON: Well, we’ve had wild growth and then kind of a make-up year, and then another wild growth year. But I think it depends on from what, you know…I would say on average, 30 to 40% a year growth. We have a 53% growth from 2014 to 2015. We are expecting to be around, anywhere between 22 and 24 million this year, in 2016.
PIRRON: Is it the future? I don’t know. I think it certainly is a good part of the future, and I think we’ll see more and more of this going mainstream. Do we have a Trifecta happening? We have conscientious consumers who are buying sustainable brands and more and more voting with their dollars when they products and services. You have especially millennials coming out of universities and MBA programs, more and more joining the impact or other sustainable business groups and wanting to do well and do good at the same time. So, the labor market’s demanding it. The consumer market’s demanding sustainability. And now you have the rise of impact investing, where investors are saying, “If you want my capital, you have to be a good company." And, not just be not a bad company, like SRI, but impact investing, where you need to show me how you’re a good company. And I think that it’s a really perfect storm that’s brewing. Whether it’s infecting corporate America through CSR requirements or whether there’ll be a rise in companies moving to becoming benefit corporations and B Corporations, I think the verdict’s out. But it is certainly a part of the future.
DK: Yes, that’s what we think too. That’s why we have this investment that my institute has made, having a benefit corporation gateway, we really want to be a fair broker: the good, the bad, and the ugly about the benefit corporation movement. So, you know, we’re supportive. We’re cautiously optimistic, but we think that the movement really has to innovate and it needs to be held accountable in its innovations, and that requires having a lot of information out there.
PIRRON: Can I make one other statement about Impact Makers?
DK: Oh, yes. Sure! Please.
PIRRON: I’m really proud of what we’ve done in cash and pro bono to date. From our inception to date, we’ve done just shy of $1.4 million in cumulative impact. And if you add that to our valuation, that will be a minimum of, let’s say $17 million. We’re already at $18-19 million if you add that up together of both realized and unrealized community impact. With a goal of by 2024 making over $100 million cumulative impact.
Posted on May 18th, 2016
Posted on April 26th, 2016
The DEA recently approved the first-ever study exploring the effects of marijuana on veterans suffering with PTSD. The organization conducting the study, Multidisciplinary Association for Psychedelic Studies (MAPS), is a 501(c)(3) that created a wholly owned subsidiary benefit corporation in December 2014. MAPS press release states:
The DEA’s approval marks the first time a clinical trial intended to develop smoked botanical marijuana into a legal prescription drug has received full approval from U.S. regulatory agencies, including the DEA and the Food and Drug Administration (FDA).
The randomized, blinded, placebo-controlled study will test the safety and efficacy of botanical marijuana in 76 U.S. military veterans with treatment-resistant PTSD. The study is funded by a $2.156 million grant from the Colorado Department of Public Health and Environment (CDPHE) to the California-based non-profit Multidisciplinary Association for Psychedelic Studies (MAPS), which is sponsoring the research.
This is a big step forward for MAPS and PTSD treatment. Currently PTSD is a qualifying condition for medical marijuana treatment in 5 of 23 states that have legalized the practice. Studies like this one provide researchers with an opportunity to determine if this treatment option is effective or not. While this study received a valuable grant, the organization still has a lot of costs. The organization is currently taking MDMA through Federal Drug Administration (FDA) and European Medicines Agency (EMA) testing. Funding research and future projects was one of the reasons MAPS created the MAPS Public Benefit Corporation.
The organization says the “special purpose of MPBC is to serve as a vehicle for conducting MAPS' research, and to balance social benefits with income from the legal prescription sale of MDMA, other psychedelics, and marijuana." Under this arrangement, MPBC will guide prescription psychedelics through FDA clinical trials and handle the prescription business while MAPS will continue to run education programs, outreach and provide a clear mission for MPBC.
Since MAPS is a 501(c)(3), it can’t sell prescription medication itself because the sale of pharmaceuticals is not an exempt activity for a non-profit. This is so the non-profit can retain its tax-exempt status. According to MAPS, “If an organization primarily operates legitimate exempt activities, it may also operate a substantial unrelated business in furtherance of its exempt purposes without losing its exempt status, as long as its primary purpose and activity continues to be exempt." Normally that would be a traditional for-profit company, but now that a benefit corporation is available, MAPS can create a for-profit company that is mission focused. That’s because a benefit corporation is a for-profit company with a legal obligation to create public good. In fact in creating their benefit corporation, “MAPS has defined MPBC’s social objectives to be identical with those of MAPS. In the event that the MPBC makes a profit sometime in the future, all monies will be legally constrained to be used for purposes consistent with MAPS’ mission." The organization also cites long term protection of the social-benefit and increased transparency as reasons for choosing the benefit corporation model.
Research like this is expensive and for a non-profit, this means a lot of donations and grant writing. MAPS estimates that there is $18 million in research remaining before they can bring their prescriptions through Phase 2 and Phase 3 clinical trials. Being able to fund itself is vital to ensure long term success. In an industry that often finds itself in the difficult position of having to balance the need for profit with the need to provide proper care benefit corporations seem like a good fit. The success of MAPS and its mission are one step closer to being sustainable.
For the latest research, news and info on benefit corporations, visit the Benefit Corporation Gateway from Institute for Business and Professional Ethics at DePaul University.
Posted on April 11th, 2016
The advantages to being a B Corp or a Benefit Corporation vary for each company. Some businesses stake their reputations and their marketing efforts on these certifications as evidence of a clear social mission.
I haven’t heard from many B Corps that they are hired by clients because they are a B Corp. But the millennial employees are very attracted to working for a company with a clear social mission, and the certification to back that up.
At StoryStudio Chicago, we prefer to use our B Corp status to educate clients and colleagues on how our commitment to a triple bottom line--people, planet, and profit—guides us. Legally, our Benefit Corporation status requires us to consider all stakeholders in the company when defining “profit." And as a B Corp, the assessment we have to pass every other year teaches us how to improve many aspects of operations, from sourcing to pay scales to company culture.
The best and most important benefit is definitely being part of a growing, international community that truly believes in using Business as a Force for Good. Here in Chicago we have a close-knit B Corp community. These are the folks I rely on for ideas, support, partnering opportunities, and friendship. Even more, we work as a team by investing our time and expertise into programs to improve our city and to reach business owners throughout Chicagoland.
Posted on March 17th, 2016
Earlier this month Westchester Medical Center Health Network announced a $230 million dollar expansion to their facilities in New York state. To help secure low-cost financing for the project, the Westchester County Local Development Corporation had to revise its by-laws to allow a benefit corporation to be eligible for funding. Previously, funding was only available to non-profits. WMCHealth will expand care, create jobs and improve infrastructure. Benefit corporations are changing how communities seek to improve the lives of its residents, and health care seems like the perfect industry for benefit corporations to make an impact. Illinois’s statute specifically lists “improving human health" as a qualifying public benefit.
Christine C. Franklin, a lawyer based in Chicago, writes “The benefit corporation structure is a ‘natural’ for a hospital providing community health care. In fact, authorizing statutes typically include a public benefit purpose of this nature. Illinois’ statute, for example, speaks in terms of ‘improving public health.’" At the time, a hospital sponsored by a religious organization was up for sale and it was a pre-condition to continue the hospital’s community service. This made a benefit corporation ideal. The hospital was not doing well financially and wanted a like minded entity to take over. A traditional corporation could abandon any mission driven activities on a whim, but a benefit corporation could allocate resources directly to the mission, while keeping an eye on profit. Another reason this alternative structure works is that there is profit to be had. Someone can invest in this hospital and make money. Benefit corporations can improve the health care system without dismantling the public service commitments present in so many local organizations.
Benefit corporations are also moving into the education side of the system. The Idaho College of Osteopathic Medicine will break ground in 2017 and is a benefit corporation. Supporters of the school, including Dr. Robert Hasty, founding dean and chief academic officer, say that they expect 50% of students will stay and practice in Idaho, hoping to help alleviate the physician crisis in the state. While this idea is not yet proven, it presents a worthwhile opportunity to experiment. Private investors are investing millions into the project and the public will hopefully reap the benefits of better access to medical care. “[Hasty] noted that after four years of medical school followed by three to seven years of residency, the first doctors won’t emerge from the new program until 2025. ‘This is not an overnight solution for the physician crisis right now in Idaho,’ he said." It will take some time to become a solution, and hopefully, it will.There are several advantages that benefit corporations have in the medical arena. They provide a public good organically, so the ability to make profit and focus on a specified mission can open up access to financing and investors. It’s much easier to raise $200 million for a business investment than for a charity. As we saw in the Chicago case, the seller preferred an entity that could continue their community service. While there may be plenty of people who would like to continue the mission, a benefit corporation can protect it in a legal sense. Benefit corporations can also bring investments and opportunity to underserved areas and places that otherwise would not get them. It might be risky for a group to build an expensive school in Idaho, but with the possibility for future profit, private investors thought they could risk footing the bill. This is still all new, so there are many untapped possibilities and unforeseen problems. In any case, health care is primed for benefit corporations.