Public Benefit Corporation law and New Space companies

[Ludus]

Companies like SpaceX, Blue Origin, or Bigelow seem to be a poor fit either as for profit corporations or non-profits. They need to be have the freedom to do business like a for profit but have business plans that are often focused on objectives that don't maximize profit. This leaves them vulnerable to lawsuits and other pressures if they go public. Especially in the case of SpaceX access to public capital markets would be extremely useful.

Elon Musk's resistance to an IPO for SpaceX seems to be based on these concerns.

http://en.m.wikipedia.org/wiki/Benefit_corporation

Do you think this new corporate form will be a better fit for new space enterprises?

[A_M_Swallow]

{snip}
Do you think this new corporate form will be a better fit for new space enterprises?

No.  The operating conditions amount to those of a charity that wants to accept contracts.  Space travel and launching rockets are not charity type activities.

[Ludus]

{snip}
Do you think this new corporate form will be a better fit for new space enterprises?

No.  The operating conditions amount to those of a charity that wants to accept contracts.  Space travel and launching rockets are not charity type activities.

I don't think you have looked at the laws. This form of corporation is otherwise identical to a for profit corporation, is taxable under the same rules, can become a public corporation with stock offerings under the same rules....generally has nothing in common with a charity. What 's different is unlike regular for profit corporations it's shielded from investor lawsuits and other legal pressure to maximize profits or shareholder value. Unlike regular corporations which current case law sees as having an obligation to serve investor interests above all, a Benefit Corp can freely pursue it's stated objectives even if they aren't maximizing shareholder value.

[getitdoneinspace]

This is a great idea. There are investors that may share the primary objective (i.e. vision) of these types of organizations and may be more concerned with reaching that vision rather than the financial return from that investment. Today there are major pools of investment dollars available to invest in companies that have an environmental mission or some societal mission.

Makes sense to allow a corporation to exploit the capital markets and, at the same time, maximize shareholder value in terms other than dollars such as reducing pollution, developing renewable energy, providing opportunities to the disadvantaged, developing technologies to exploit resources beyond earth, researching the cure for some rare disease, etc. etc. Not every investor is solely concerned about financial payback.

This would also be an extremely valuable experiment in my view. Perhaps these firms, with a much longer term view, would ultimately provide a higher financial return than those firms always worried about the next quarter and planning on that time horizon.