Being the Change: Better Ventures is a Certified B Corp
Better Ventures is now a certified B Corporation! This was a long time coming and something we’ve wanted to do for years, and we finally mustered the energy and bandwidth to go through the rigorous certification process. By definition, certified B Corporations are “for-profit companies that use the power of business to build a more inclusive and sustainable economy. They meet the highest verified standards of social and environmental performance, transparency, and accountability. ” B Corps adhere to the principles laid out in the B Corp Declaration of Interdependence:
While we have embodied these core principles since our founding in 2011, we felt it was important to go through B Corp certification to independently verify our approach to impact and communicate our commitment to mission-driven business. We believe that companies can be a force for good in society, through their products and services and by the way in which they operate (more on our impact framework here). We exclusively back companies that are working towards one or more of the UN Sustainable Development Goals and are committed to diversity, equity, and inclusion. The impact we seek to underwrite is intrinsic (i.e. tied directly to the product and business model), direct (i.e. the product creates the impact), measurable (e.g. CO2 emissions offset, people served, and jobs created), and scalable (i.e. grows with revenue). Within our internal operations, we strive to minimize our own carbon footprint (e.g. biking to work, composting & recycling), care for our employees (e.g. 360 degree performance reviews, commitment to DEI), and give back to our local community (e.g. supporting organizations focused on building a more diverse and inclusive tech sector in Oakland).
While we are certainly motivated by societal imperative, we also believe that these principles represent good business practices that enhance profitability. Our core investment thesis is that mission-driven companies outperform the market. There are three components to this: (1) mission-driven founders who are intrinsically motivated to solve big problems are more likely to succeed, (2) mission-driven startups attract the best talent because they offer meaning and purpose in work, and (3) customers are drawn to mission-driven brands. On a micro level, we’ve seen all three of these phenomena at work within our portfolio, particularly in recruiting, as our companies have been able to successfully go head to head with larger companies that can offer more pay but cannot compete on purpose at work (check out our Mission Driven podcast for concrete examples). On a macro level, the recent outperformance of ESG funds offers strong evidence of the financial upside from a mission-driven orientation.
I’ve known Jay, Bart, and Andrew, the B Lab founders (the org behind B Corps), since they launched in 2006, which was right around the time I got my start in the mission-driven venture space with Good Capital. I’ve always admired their work and shared their ethos for the role of companies in society — going beyond the Milton Friedman principle that the “business of business is business” (i.e. maximizing only shareholder value) to an expanded view of maximizing value for ALL stakeholders including employees, customers, suppliers, communities, and the environment.
Many kudos to the B-Lab team and their dogged pursuit of that vision back in 2006, as today there are over 3,000 B Corporations in 75 countries across 130 industries, with companies such as Patagonia, Etsy, TOMs Shoes, and Danone among them. This movement has taken hold of the broader market, culminating in an August 2019 meeting of the Business Roundtable (an influential public policy nonprofit made up of CEOs) when they passed a resolution that redefines the role of business in society to maximize stakeholder value, moving away from the Friedman principle. This sentiment was also reflected in the now famous 2019 “profit and purpose” letter to CEOs written by Larry Fink, CEO of BlackRock, one of the largest asset managers in the world. B Lab, via their lobbying efforts over the years, has had a big hand in this significant mindset shift in the role of business in society.
We are fortunate to be among a select group of B Corp certified companies, particularly in the venture business. This certification communicates our operating principles to the broader market and demonstrates our belief that startups can be a force for good in society. We want to partner with founders who share this ethos, which we have now done with over 50 companies across three funds. While we don’t exclusively invest in B Corporations, all the companies we back reflect the B Corp ethos, and over time we encourage our portfolio companies to pursue certification given the many positive brand signal benefits it affords. We are inspired by this movement and will continue to play a role in growing this sector of companies over time. If you’d like to join the B Corp movement and get started on your certification (it’s never too early to begin!), you can find more information here.
