Kickstarter Undergoes Corporate Restructuring, No Longer Beholden To Shareholders

News
By Kevin Carbotte
published

Kickstarter Inc. announced that the company is no longer Incorporated. The company has been re-registered as Kickstarter PBC. PBC stands for "Public Benefit Company," and it is a fairly new way to register a business. PBCs are legally required to consider how their actions will impact society. Corporations, by nature, are out to make a profit and answer to the shareholders, with little regard for the social ramifications.

Kickstarter said it is excited to join this group of forward-thinking businesses, and said that currently, only 0.01 percent of American businesses are registered as Public Benefit Companies. Kickstarter believes this will change in the coming years as more and more people reject the notion of "profit above all."

Under the new Kickstarter PBC structure, the company has committed 5 percent of its post-tax profits to be donated to arts education programs and organizations fighting for equality. Be donating post-tax dollars, the company is showing that it is not doing this to pad its bottom line. Many corporations would use any means possible to minimize taxes, writing donations off as tax deductions.

The company founders said there wasn't a single vote against the idea of restructuring as a PBC from any of Kickstarter's shareholders. The company has always had a focus on serving artists and creators, and it believes that the new Public Benefit Company designation reinforces that mission in the best way possible.

For more information about Kickstarter PBC's values, the company has posted its full charter online for all to see. 

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Kevin Carbotte

 Kevin Carbotte is a contributing writer for Tom's Hardware who primarily covers VR and AR hardware. He has been writing for us for more than four years. 

7 Comments Comment from the forums
  • targetdrone
    This shows 1 of 2 things, 1)Kickstarter is misleading the public about the tax status of donations or 2) Kickstarter hired a stupid Tax Attorney and Chief Financial Officer.
    Reply
  • stingstang
    Not sure why this company would even WANT shareholders. They must not have that much overhead, being strictly online and holding a few servers somewhere for the site... Amway's been debt free for...like ever. No need for shareholders means you're not as affected by market shifts. That's why they've been so successful for so many years.
    Reply
  • targetdrone
    Not sure why this company would even WANT shareholders. They must not have that much overhead, being strictly online and holding a few servers somewhere for the site... Amway's been debt free for...like ever. No need for shareholders means you're not as affected by market shifts. That's why they've been so successful for so many years.

    A long time ago a company would sell stock to raise capital to start or expand a business. Now already established companies go public so the founders can cash out and laugh all the way to the bank. Like Facebook and Alibaba.
    Reply
  • Fragulator
    "Kickstarter believes this will change in the coming years as more and more people reject the notion of "profit above all.""
    Are you serious, when we take the profit out of anything, we know that there is no incentive to work, and therefor, as in Soviet Russia, and any other Communist country, and the pattern of failure is all around them.
    Sharing the wealth sounds like a good idea, but doesn't work. Do these people, kickstarter, really think that business leaders who make the big bucks are going to all of a sudden get a conscience. And don't just say its the new businesses that will get on board, and in my opinion, will likely be the ones that fail.
    Just more "social justice" BS, and nothing more.
    Reply
  • kcarbotte
    16665911 said:
    "Kickstarter believes this will change in the coming years as more and more people reject the notion of "profit above all.""
    Are you serious, when we take the profit out of anything, we know that there is no incentive to work, and therefor, as in Soviet Russia, and any other Communist country, and the pattern of failure is all around them.
    Sharing the wealth sounds like a good idea, but doesn't work. Do these people, kickstarter, really think that business leaders who make the big bucks are going to all of a sudden get a conscience. And don't just say its the new businesses that will get on board, and in my opinion, will likely be the ones that fail.
    Just more "social justice" BS, and nothing more.

    They aren't taking the profit out of anything.
    Benefit companies just have to be conscious of thier impact on society, and do things to improve it.
    5% is hardly taking all the profits, and Kickstarter chose that figure, it's not dictacted as a requirement for a PBC.


    The current up and coming generation (generation z) seems to be a lot less interested in material things and wealth accumulation. They want more even distrobution of wealth. PBC's are one way to get there, and it makes sense to think that many companies will make the switch, especially those run by younger people.

    You won't see many giant corporations switch over, as there would be massive dissent from the shareholders, but smaller companies and upstarts are a different story.

    Reply
  • whiteruski
    Long before my time, companies treated their employees well and were a positive influence in their community. Its such a weird thought nowadays that it is even weird writing it.

    You read about this but I never thought that companies would be good players to society at scale. Maybe this trend will continue :)
    Reply
  • cats_Paw
    "PBCs are legally required to consider how their actions will impact society."
    The company workers and staff and owners are society as well, so...
    Reply