A public benefit corp shouldn’t be a start up. The primary goal of a start up is to grow as quickly as possible which is rarely benefits the public.
Very silly to call every non start up a lifestyle business. It’s just a business. Start up are the weird thing that almost always an obscene waste of time and money, but sometime creates google.
A PBC is not a charity or a non-profit. PBCs are for-profit businesses with the goal of making money. In day-to-day business they're indistinguishable with other for-profit corporations, including fundraising and investment. The only real practical difference is that they give directors a little more leeway in their fiduciary duties to say "no" to doing evil things.
The advantage to a PBC is protecting founders from a serious problem with standard corporations: you might bring on investors who could subsequently demand you pollute, exploit people, and/or do other immoral activities for profit. You don't have to do these things to grow a business quickly.
> a serious problem with standard corporations... immoral activities for profit
A politician could trivially write a law to end this "problem", at any point. Or courts could start rejecting suits where investors sue. There is nothing inherent in nature that requires this outcome to exist.
This is an entirely self-made problem that society tolerates when it doesn't have to. Corporations used to need a blessing from the government to be formed, explicitly to avoid the risk of a massive corporation who can compete with the government and have investors that push anti-social goals.
I don’t think there’s some practical way to force existing corporations to include something in their charter, if that’s what you’re suggesting. Business organization is something that a business chooses to do.
> I don’t think there’s some practical way to force existing corporations to include something in their charter
Laws are but a pen stroke away.
<legalese intro>
No existing nor new C corp and their executives shall be be considered in breach of their fiduciary duties or obligations if they take an action they deem to be in the best interests of society at large, as long as it’s not fraudulent or otherwise illegal behavior.
Yeah, I know a law is just words written down... but what you're suggesting is not even what a PBC even is... you're suggesting something so radically different that it would be silly:
1. Corporate charters and form of incorporation are consensually chosen by those involved.... you're suggesting something that is in violation of that consent. This would have crazy unintended consequences. Remember that a corporation is not necessarily a business. Imagine an investment holding company, or a building cooperative, where the directors could have a blank check to use money for some unrelated public benefit. That's completely bonkers.
2. PBCs don't get to do any "action they deem to be in the best interests of society at large"... they get to do things that are in the interest of specific public benefit goals which they have defined in their charter and those are balanced with the interests of shareholders. Everyone involved knows and agrees with what these specific public benefits are, which is an important thing.
> The only real practical difference is that they give directors a little more leeway in their fiduciary duties to say "no" to doing evil things.
I’d like to provide maybe a clarification here that there is zero existing fiduciary duty in regular corporations to say yes to evil things, or even to turn a profit at all. A for-profit C corporation can legally sell stock, lose money every year, and go out of business, if the board of directors approves that strategy. Fiduciary duty exists primarily in areas of accurate communication and the avoidance of crime, fraud, etc.
A B corp basically is a C corp, but one that has formally published that their strategy includes a commitment to some social benefit. But if a C corp wanted to publish the same message to shareholders it could, and shareholder recourse would basically be to either try to replace the board, or sell the stock.
Fiduciary duty absolutely does go beyond accurate communication and fraud. Directors have a duty of care that goes beyond simply not engaging in criminal fraud. Sure, you don't have to be competent, successful, etc. It is completely legal to suck at your directorship. But it's not legal to do something that you can't justify as being good for the business, which is where a public benefit activities can cross the line.
Consider the eBay/Craigslist case, eBay Domestic Holdings v. Newmark:
> When director decisions are reviewed under the business judgment rule, this Court will not question rational judgments about how promoting non-stockholder interests—be it through making a charitable contribution, paying employees higher salaries and benefits, or more general norms like promoting a particular corporate culture—ultimately promote stockholder value. Under the Unocal standard, however, the directors must act within the range of reasonableness. Ultimately, defendants failed to prove that craigslist possesses a palpable, distinctive, and advantageous culture that sufficiently promotes stockholder value to support the indefinite implementation of a poison pill. Jim and Craig did not make any serious attempt to prove that the craigslist culture, which rejects any attempt to further monetize its services, translates into increased profitability for stockholders.
This is where a PBC would have been different. With a PBC, courts are directed to balance the the stockholders interests with the company's stated public benefit.
Craigslist the corporation was not even a party to this suit, and it continued operating the same way after this decision as before it. eBay’s only recourse to that was to sell its equity, which it ultimately did in 2015.
I don’t think anyone can look at the company Craigslist in 2026 and say it has spent the last 30 years satisfying a legal duty to maximize profit.
The case was about Craig and Jim's stockholder-rights plan which they put into place to protect the direction of the company after their death. They're still alive... so of course, the past 30 years don't have anything to do with it.
The point of my example was the legal standard used.
> The primary goal of a start up is to grow as quickly as possible which is rarely benefits the public.
Why is that so? Fast growth, when achieved honestly, is a result of solving user pain that others haven't. Maybe you think so because users != the public, but I think in totality the public is a collection of users who all have needs they want met.
For certain amount of fast growth: yes. Then there's continued "growth-hacking" and enshittification to keep fast revenue growing after the pain point has been solved with dark patterns and questionable tactics.
Why? Because investors poured a bunch of money in to support fast growth and now they want their money back. And incremental growth won't do. Since 9 out of 10 of the investments fail, the surviving one has to continue to growth-hacking revenues.
Very silly to call every non start up a lifestyle business. It’s just a business. Start up are the weird thing that almost always an obscene waste of time and money, but sometime creates google.