Etsy announced yesterday that the company has become a Certified B Corporation. In doing so Etsy joins a growing group of now over 500 companies that includes Patagonia and Seventh Generation. We are excited about this as it fits well with our beliefs about the changing role of businesses.
Etsy is a great example of the Internet-based networks and marketplaces that are reshaping our economy and society. At Union Square Ventures, these types of networks are central to our investment thesis. We are committed to protecting and enhancing the freedom for networks to form and operate, which was a key theme of our recent Hacking Society event.
We are also interested in what makes a network or marketplace sustainable over time. We have come to believe that the best long term steward of a network will be a company that focuses on value creation for all participants in the network instead of solely for its shareholders. Becoming certified as a B Corp provides a measurement framework that dovetails extremely well with this more comprehensive approach.
Several US states including California and New York have already adopted laws to allow companies to make this broader commitment part of their legal foundation by changing their bylaws to formally become a so-called Benefit Corporation (instead of a C Corp). Most venture backed companies are incorporated in Delaware and while they can get certified like Etsy, they will have to wait until Delaware adopts the Benefit Corporation before they can change their legal status.
If you want to learn more about why Etsy chose to become certified as a B Corp please CEO Chad Dickerson’s great blog post placing it in the context of their just completed funding round.