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I don't think that would have much of an impact. The focus on profits from VCs/investors isn't due to the corporate structure of the company, but the VC Firm's
by mikeyouse 10y ago
I don't think that would have much of an impact. The focus on profits from VCs/investors isn't due to the corporate structure of the company, but the VC Firm's internal metrics -- the 10-year fund lifecycle, LP demands, etc.
Also the mechanism of leverage isn't the fiduciary duty that's placed on LLC / C-Corp management -- the idea that businesses are legally bound to chase profits is misguided. Company management must act in the best interest of shareholders, but have an incredible amount of leeway when doing so. The leverage from VCs comes from their ownership of significant chunks of the company and board representation. They can replace the management team if they don't acquiesce to VC demands. Changing the corporate mission statement won't mitigate these problems.
- leggomylibro 10y agoThat's a good point; I guess it wouldn't really help much in the startup phase, but if the company does get established and IPO'd, then it would make a difference with the looming threat of minority shareholder lawsuits.