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by purlane
580 days ago
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That is not what this means at all. Legally, it means that the company has other priorities that it must consider equally to creating profit. This means that investors have a much higher standard to have standing to sue the company or oust the CEO if they don't return a profit or don't return profits directly to investors. A good example of what this means in practice is developer awards from Bluesky Social. As I understand it, once Bluesky PBC starts making some profit they are planning to begin placing something akin to bounties on successful app projects within the protocol. I believe Graber called this "Coopetition" at some point, where developers are "competing" within the ecosystem but simultaneously working together to make the protocol's foundation stronger. This is something that a PBC structure makes immeasurably easier to do. Why? Because the company has more responsibilities than simply returning profit to shareholders. The shareholders can't simply sue the company or oust Graber because of this, since Bluesky Social also has a legal responsibility to "develop and drive large-scale adoption of technologies for open and decentralized public conversation". Please do get read on what it actually means to be a PBC. |
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Ok, so it's even more vague than how I understood it. This could mean anything.
Venture capital does not care about profits, they just care about selling their share at a considerably higher price than they bought it within ~ 7 years. In reality, most of the time, this happens through an acquisition. Many times this happens without the acquired company making a single cent of profit.
So how does it matter that Bluesky Social is a PBC in this context? It is still owned and controlled by shareholders, many of them venture capitalists. It can still be sold at an uncapped profit to the share holders.