Technology

Purpose and profit: Why this venture capital firm became a ‘B-Corp’ and wants others to follow

The Maveron team. (Maveron Photo)

Dan Levitan isn’t confident that the U.S. government can solve the country’s pressing problems, at a time when it needs help more than ever.

“Sadly, I think more and more of us have lost faith that government is going to make this country better, given the lack of bipartisanship and gridlock about governance,” said the Maveron co-founder. “The role of companies and doing the right thing is more important than ever.”

That’s why the venture capital firm he helped start 23 years ago with former Starbucks CEO Howard Schultz recently became a Certified B Corporation, or a “B Corp.”

Dan Levitan, co-founder of Maveron. (Maveron Photo)

The designation is given to for-profit companies that adhere to standards for social and environmental performance, public transparency, and legal accountability. The idea is to make sure businesses have an overall positive impact on the world — to balance profit and purpose, according to B Lab, a nonprofit that administers certifications. There are more than 3,500 “B Corp” businesses worldwide.

“We very much believe that profit and purpose can sit side-by-side and not compromise one another,” said Natalie Dillon, a principal at Maveron.

The firm, which has offices in Seattle and San Francisco, first learned about “B Corp” when it invested in popular shoe brand Allbirds in 2016. Other startups in its portfolio, which is focused on business-to-consumer companies, also have the certification.

There are fewer than ten investment firms nationwide that have “B Corp” status, but Maveron thought it made sense to get the designation. It already had “Profit + Purpose” as one of its core values, and decided to do the extra work to get “B Corp” certified.

The process included hundreds of questions about its business — legal structure, decision-making, demographics of employee and customer bases, impact on the environment, and more. “It was a pretty heavy lift,” said Pete McCormick, partner at Maveron.

The “B Corp” status adds to other related initiatives at Maveron, including its participation in Diversity Riders, which aims to increase investor diversity on startup deals, and donating a portion of its carried interest profits to causes such as social justice.

“We’ve been here for more than 20 years, and a lot has changed,” McCormick said. “There’s a strong sense that businesses need to do more.”

Levitan said Maveron alone can’t make a big difference in doing more “good” for the world. He encouraged other companies and investment firms to also become “B Corp” certified.

“If Maveron, other VCs, and other portfolio companies unite around a different set of business principles with a higher commitment to other things besides just making the most money they can for their constituencies, then collectively the U.S. and the world will be better off,” he said.

Maveron has made more than 250 investments since 1998. It is investing out of its seventh $180 million fund. Its portfolio companies have had 11 IPOs and 14 of them earned valuations of $100 million or more. Notable exits include eBay, Groupon, Shutterfly, Trupanion, Zulily, and others. More recent investments include Pacaso, Booster Fuels, Imperfect Foods, Modern Fertility, and more.

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