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Why This VC Firm Thinks B Corporations Are A Good Investment

The Collaborative Fund believes that B Corp social good certification is a signal that startups are making decisions that are better in the long term.

Why This VC Firm Thinks B Corporations Are A Good Investment
[Illustrations: kstudija via Shutterstock]

At least one venture capital firm thinks that B Corporations, which have been certified to meet certain standards of social good and environmental sustainability, are a worthy investment.

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CircleUp, a site that connects angel investors with consumer products companies, announced last month that it’s joining up with the Collaborative Fund to invest $4 million in B Corps. The investment is part of CircleUp’s B Corps Circle–essentially a small fund or syndicate anchored by Collaborative Fund, in this case.


“We’re investors in a handful of crowdfunding-related things, and CircleUp has as one of the groups that has proven to succeed and build up a new marketplace,” says Craig Shapiro, founder of Collaborative Fund. “We’ve also been a fan of B Corps. We need a measuring stick for corporate social responsibility, for businesses to measure their broader impact.”

Many of the startups seeking funding on CircleUp’s platform–and many B Corps in general–are consumer products companies. On CircleUp, they include Olomomo, a producer of socially responsible nuts; and Make a Stand, a lemonade company and B Corp.

Collaborative Fund is investing in the CircleUp B Corps Circle because it believes in the mission and the companies, of course, but Shapiro looks forward to the day that there are more tech-focused B Corps. “In order for B Corp to take hold, I’ve been kind of waiting, wishing, wanting it to permeate within the technology community. It feels like it’s starting to do that,” he says.

Shapiro believes that B Corp certification creates the space for companies to make decisions that are better in the long term. But while most VC firms aim to return money to investors as quickly as possible–not exactly conducive to longer-term thinking–he says that Collaborative Fund is different.

“Our mandate is to invest in long-term sustainable iconic businesses that hopefully will exist for 20 or 50 or 100 years,” he says.

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Collaborative Fund’s other investments include CrowdRise, Kickstarter, Good Eggs, and Lyft; the fund explains on its website that it evaluates new opportunities based on whether they will make “the world a better or more interesting place” if they succeed.

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About the author

Ariel Schwartz is a Senior Editor at Co.Exist. She has contributed to SF Weekly, Popular Science, Inhabitat, Greenbiz, NBC Bay Area, GOOD Magazine and more

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