The B Corp Guy: Helping Companies Benefit Society and Shareholders
(3BL Media and Just Means)- Known as the ‘B Corp Guy,’ Dirk Sampselle, JD/MBA, is an expert in the benefit corporation legal entity that provides a framework and certification for companies that wish to benefit society as well as their shareholders. Sampselle became the ‘B Corp Guy’ during an internship with the B Lab, the non-profit that serves entrepreneurs by guiding them through the legal infrastructure of the Benefit Corporation certification. Sampselle helped the B Lab write the Benefit Corporation statutes for state legislatures; as of today, nineteen states, plus Washington D.C., have adopted Benefit Corporation Certification as a legal, business entity.
Sampselle founded two companies to complement his legal work in the B Corp movement: B Revolution and ezBcorp. B Revolution Capital, serves as an investment firm which connects B Corps with impact and social investors.
“I wanted B Revolution Capital to be a hub for investors to come and learn about social impact. To grow the movement I knew we had to more or less target traditional investors who are ‘impact curious.’ They are asking questions like, ‘I am interested in impact investing, but what are the benefits and how do I get involved?’ I have investor contacts like this who are interested. I set them up with an initial call with a B Corp who fits their particular public benefit interest for a mentorship discussion.”
“But why should an impact investor consider partnership with a B Corp? What’s the benefit to the investor?” I asked Sampselle.
“The benefit is that certification provides the investor with metrics. And because of the B Corp’s legal structure, investors also have a right to more performance data than in a traditional entity. The reporting investors receive is much more robust. The B Corp entity is legally accountable to provide information to you and other stakeholders. There isn’t the worry about structuring impact reporting terms. It’s all standardized,” Sampselle said.
“Another big benefit of [investing into] the B Corp legal entity is that it reduces transaction cost for investors. Investors aren’t investing into a bunch of LLC’s where everything is customized. They can go back deal after deal and know exactly how it functions.”
“But how do you explain to investors the gray place in which B Corps operate, how they simultaneously balance profit maximization and pursuit of their public benefit?” I asked.’
“That’s a great, question and I think I have a decent answer. The answer to that is largely a legal question: Is the company structured to have the profit or public benefit to be the priority? It’s all about structure. It’s an important question because operations are impacted and companies have to decide which trade offs to make. These are very important decisions for executives and board members,” Sampselle answered.
Sampselle explained that in all states that have adopted Benefit Corporation legislation, except for New York and Delaware, the legislation explicitly states that companies ‘may limit other purposes.’ New York statute prescribes that the public benefit purpose must be superior to all other purposes and that it ‘shall limit all other purposes of the organization.’
“This one word difference is very important. In New York if you have the opportunity to make a bunch of profit but it’s going to harm your purpose, you are legally required to have profit limited as to protect your public benefit,” Sampselle explained.
Delaware legislature, however, does not state that B Corps must have a general public benefit purpose. Rather, B Corps must state a specific public benefit purpose and balance that with other interests of the organization. Sampselle explained that Delaware B Corp legislature is much more broad and open-ended, providing companies the freedom to define their priorities as they like.
“For states that say ‘may limit other purposes,’-that’s a quarter of what I do. I work with boards and executive teams to figure out which role purpose will play. I help them decide whether they are a profit-focused organization or focused on general public benefits or focused on a specific benefit. Then I help them decide how they can structure it.”
ezBcorp, Sampselle’s other B Revolution company, partners with small companies and social entrepreneurs as they pursue legal, B Corp certification and work through the ‘may’ vs. the ‘shall.’ Companies can also choose not to have any rules for how they structure profit versus purpose and they can and keep it flexible. ezBcorp assists B Corps as they customize their structure in their by-laws.
Sampselle’s desire to marry profit with purpose surfaced after he left the commodity brokerage industry and started a non-profit that served the homeless community in Gainesville, Florida.
“I had been the most profit-focused you could ever be and then within a year I was the most purpose-driven you could ever be. [After I left the brokerage firm] I decided I wanted to give back to help solve one of the big problems of the world. I wanted to be useful to the world. I was attending the University of Florida and there’s a big homeless problem in Gainesville so I decided to start a non-profit. I made no money from this non-profit. I poured money into it. The non-profit had the goal of helping homeless people get back on their feet. We would take in eight people at a time. It was completely student run with over 300 student volunteers. It was really amazing. I thought it was great, but it was going to be a decade before we could build up enough capital to pay a decent salary to anyone. I didn't’ feel right taking donations to pay myself.
So, I thought I would go to law school so I could help homeless people. When I got to law school, there was a professor who knew my journey and encouraged me to look at B Corps in 2009. I read their website and the home page said, ‘profit plus purpose.’ I thought, ‘no way.’ It’s being a commodity broker with purpose. It was the perfect fit for me," Sampselle shared.
"Ultimately, you have to make money to support your purpose. [in the B Corp model] you can create jobs for people while at the same time creating outcomes that are beneficial to society. And the ethos, values, and consciousness- the culture you build, it all matters. B Lab's work was so audacious. I loved that. We were saying, 'we are going to do something which no one has fathomed. We are going to change the way business is done.'
Sampselle believes that B Corps just make ‘good business sense.’
“B Corps are the perfect [business] architecture for the 21st century. As resources become more scarce, consumers become more socially and environmentally conscious and businesses have to be more competitive and stakeholder conscious. Businesses are forced into a business model that takes all these things into account. And, employees want to work for businesses that do good, customers wants to buy from them, and the investors are already value-based. B Corp Certification gives investors, employees and customers a transparent set of metrics to evaluate how well a company is doing, not just how well they say they are doing. B Corps are really the next generation of business,” Sampselle empathically explained.
I’d agree that Dirk Sampselle is in fact, ‘the B Corp Guy.’ But, soon enough, I think he’ll be forced to share that title with an entire generation of social entrepreneurs who define business as social impact.
For more information on B Revolution Capital and ezBcorp, read here and here. If you're hungry to get into the juicy details of B Corps, read this White Paper co-authored by Sampselle. Read an article I wrote on the 'B Revolution' here.