Known Privacy is proudly a Public Benefit Corporation. Our legal name is Known Privacy, PBC.
A Public Benefit Corporation is not too different from a traditional for-profit company. We issue stock. We have a board of directors. We are for-profit.
The big difference is that a Public Benefit Corporation can put the public good above its own profits.
This is very different from typical companies, where you have a fiduciary responsibility to shareholders as the top priority of the firm.
Having a fiduciary responsibility to shareholders is how companies have generally always worked. Most businesses purely look to make a profit, since making money is generally the top priority of most investors.
The idea of a Public Benefit Corporation is a relatively new concept, but is catching on fast.
We have a bigger mission than profit at Known Privacy.
We are working very hard to secure privacy for all consumers. In a typical company, this could actually get us into trouble if we had shareholders who didn’t put the same priority on privacy as we do.
There are times where we will have the choice: privacy or profit?
As a Public Benefit Corporation, we get to choose privacy every time. We always will, even if we make our shareholders less money.
Having a legal framework to do this is really important to be able to make the decisions we need to make to get our privacy back.
We’ve enshrined these principles into our founding documents that govern our company. Here is the text from our Certificate of Incorporation, filed in the state of Delaware, United States.
We wish it were a bit more readable and relatable, but our lawyers of course like it this way:
“The purpose of the Company is to engage in any lawful act or activity for which a public benefit corporation may be organized under the DGCL and to produce a public benefit and operate in a responsible and sustainable manner. To that end, the Company shall be managed in a manner that balances the stockholders’ pecuniary interests, the best interests of those materially affected by the Company’s conduct and shall have a positive impact on society and technology. In order to accomplish the foregoing, while the Company may sell products, services, applications or engage in similar activities either alone or in conjunction with third parties, the Company shall not for pecuniary gain:
(i) put a higher priority on profit versus an individuals’ choice about their digital privacy; or
(ii) intentionally share or sell customers’ data without transparency to and permission from the customer.
In the event of a Deemed Liquidation Event (as defined below), the Company shall require any acquiring entity to adopt the requirements set forth in this Article III with respect to the operation of Known Privacy or its assets. “
Yes, you read that correctly, if another entity wants to buy Known Privacy, they would have to adopt these principles. They can’t just buy us and then change how we do business. We’d never let that happen, but it is helpful to have it in writing.
Why aren’t you a non-profit?
There are two reasons we thought it important to be a for-profit entity.
The first is that to truly solve for privacy, we need to grow and scale. It is very hard for a non-profit to get to the kind of scale we want to achieve. The more money we have to work with, the greater investments we can make into privacy as a category.
The second is that we believe in the power of capitalism for good. We want to show the world that you can start a company that changes the world for the better and make money at the same time. If more companies follow this path, the world will become a better place.
Public Benefit Corporations are a great way for companies to balance the Public Good with Profit, and for us ensures we can do everything we can to bring you back your privacy.