A GREATER PURPOSE: Navvid founder, Michael McCarthy and co-founder Jacob A. Brennen see the new benefit corporation structure as a positive for Rhode Island.
PBN PHOTO/BRIAN MCDONALD
By Patrick Anderson PBN Staff Writer
When Rhode Island became the latest state to allow a new hybrid form of socially conscious business, it had entrepreneurs like Michael McCarthy of Newport in mind.
An animator and illustrator at AS220 in Providence, McCarthy is in the process of launching an online open-source video-content-management system (described as a Wordpress for video).
Active in the Occupy movement, McCarthy wants the business, tentatively named Navvid, to democratize and empower people to use new media.
But because of the history of technology startups with an ideological component being sold or taken on another course, McCarthy is looking to incorporate using the new hybrid structure, called benefit corporations, that Rhode Island just made law.
“Few companies move as fast as tech startups, and once they expand, the angel investors and venture capitalists start thinking about seeing a return on their investment,” McCarthy said. “That is not always a bad thing,” but he hopes the new law will slow the process down a little.
Whether McCarthy’s interest in forming a company halfway between a for-profit and nonprofit will be shared is unknown, but supporters of benefit corporations say it can’t hurt to give them the option.
“We think it could attract a certain type of company to Rhode Island, but we really don’t know how many will really pursue it,” said state Rep. Teresa Tanzi, D-South Kingstown, sponsor of the benefit corporations bill. “But it provides protections for people who want to put their heart and soul into a company and have the legal protections they deserve.”
The benefit-corporation structure was developed out of fears that legal obligations and the very nature of for-profit corporations could be at odds with maintaining a social mission.