Startups that officially prioritize social goals over profits are actually twice as likely to land venture capital as normal companies.
March 25, 2026
Original Paper
Breaking with Shareholder Primacy: VC Investment in PBCs
SSRN · 6331039
The Takeaway
While it is often assumed that professional investors avoid 'Public Benefit Corporations' because they dilute the focus on shareholder returns, data shows these firms are actually preferred by VCs. This suggests that relaxing the requirement to prioritize profit at all costs may actually facilitate financing when social and investor values align.
From the abstract
This paper studies the intersection between corporate purpose and access to finance by examining venture capital (VC) investment in public benefit corporations (PBCs), a Delaware corporate form that allows firms to pursue social objectives alongside profit and has been adopted by leading AI startups such as OpenAI and Anthropic. Using newly assembled data linking the universe of Delaware PBCs to all Delaware-incorporated firms and comprehensive VC investment records, we find that PBCs are more l