Welcome to the Successful Entrepreneurs Blog Series. In this monthly blog series, Harvard Business Services, Inc. will interview a variety of successful entrepreneurs whose companies’ range from small to large and local to international.
Disclaimer: Some of the featured companies are clients of Harvard Business Services, Inc., and we will disclose this information. If you have a suggestion for a Successful Entrepreneur blog post or would like your company to be featured in this series, send us an email.
A Public Benefit Corporation is a business entity with a dual purpose—to profit shareholders as well as benefit the public. Every Public Benefit Corporation includes a declaration that it will attempt to maximize shareholder value as well as provide a social benefit. It is an excellent option for entrepreneurs who want to form companies with clearly defined social contributions. We spoke with entrepreneur James Stuber about Alltham, P.B.C., his Delaware Public Benefit Corporation.
Alltham PBC At-a-Glance
|Incorporation Date||October 4, 2013|
|Products/Services Offered:||Alltham, PBC is multi-channel marketplace where consumers can discover, share and purchase a wide selection of American-made products|
|Incorporation Type:||Public Benefit Corporation|
What inspired you to start Alltham PBC?
I actually had an entrepreneur’s light bulb moment that involved a light bulb. I unscrewed a light bulb and when I looked at it, it struck me, it had the GE Logo, but in all caps it said [made in] CHINA.
Soon after that, I went to the Boy Scouts store and everything was made in China, Vietnam and Bangladesh. The Boy Scouts are illegal in China and Vietnam.
I heard a Chaplain for prisoners speak and I thought, ‘Wouldn’t it be easier to keep young men straight if jobs were available in their communities?’
These experiences set me off on this journey to answer the following questions:
Why does it seem like everything is made somewhere else? Isn’t that causing problems? What can we do about it?
It is logical to think that consumers can solve this problem: We are 70% of total spending. But it turns out that it is hard to buy American-made products. The internet should be able to help us with this, but it doesn’t. Why not? Efforts-to-date have fallen short and so, there is an unmet need. This is where Alltham PBC gets its mission.
What is Alltham’s mission?
Alltham’s mission is to build healthy communities, to help people buy things that were made in America. Alltham stands for All Things American-made. We make it easy to buy American-made goods and what we are offering are products of excellent quality and design that are safe and durable.
We give a portion of each sale to training veterans in manufacturing jobs.
Why did you choose the Public Benefit Corporation over a General Corporation or a Non-Profit Corporation?
Two reasons—the first is a legal reason. We incorporated as a PBC so that we can legally pursue this public mission, in addition to a profit, and we are not limited to always and only doing what is most profitable. Also, I am thinking about the exit. There is something called the Revlon Rule, whereby you must always sell a company to the highest bidder. The PBC releases the company from this legal obligation.
The second reason we chose the Public Benefit Corporation was to position the company so that people know that Alltham is committed to making a difference and to having an impact. By incorporating as a PBC, we put it right out there that we are pursuing the public good through our mission.
Alltham PBC is one side of what I am doing—the commerce side. I have also formed a non-profit 501(c)(3) educational organization to raise awareness of the problem of offshoring jobs and how consumers can solve it. I have also incorporated a non-profit 501(c)(6) legislative advocacy organization. Its mission is to seek clear country of origin labeling in product descriptions on packages, in catalogs and on the Internet so people can make an informed decision.
You operate out of Pennsylvania; why did you choose to incorporate in Delaware?
We operate out of Wayne, Pennsylvania. I am an attorney, so I may be more cognizant of legal issues, and a Delaware corporation makes sense for a number of legal reasons. First, I chose to incorporate in Delaware because being a Delaware corporation can certainly help to facilitate an Initial Public Offering. If we go public, being a Delaware corporation could prove to be very important. Second, I have experience as an entrepreneur and in early stage companies, and Delaware has well-developed corporate law that can protect and help a company and make investors more comfortable in investing in it.
Why did you choose to incorporate through Harvard Business Services, Inc.?
I have had a very good experience with Harvard Business Services, Inc. I was helping to lead a turnaround of a publically traded company and Harvard was there as the Registered Agent, and I came to experience Harvard’s level of service, which I thought was quite high.
You see, there was an error in the company’s filing of the initial Articles of Incorporation. It was the company’s fault. The company had intended to file a more wholesome version, but they did not do it. We had to find some case law that might allow them to go back. Harvard’s Chairman and founder, Rick Bell, helped us in this process—of going back and doing that which the company should have done originally. This is an example of how Harvard Business Services, Inc. and Delaware’s well-developed corporate law and Court of Chancery can make a difference down the road.
I have incorporated several companies with Harvard since then and I continue to be delighted with the service.
Has having a PBC helped you to raise mission-aligned capital? Has it helped you to attract the attention of venture capitalists or social investors?
On the investment side, I have certainly seen that being a Public Benefit Corporation creates receptivity to our concept. It makes it easier for me to tell a clearer story. I have raised $200,000 out of $2 million so far and I think ultimately it will attract social investors and consumers who know that we are in it for a higher purpose.
Do you have any advice for other entrepreneurs?
Try to engage in a network of other founders whom you can bounce ideas off of. I can give you a specific example: I had breakfast the other day with a fellow entrepreneur. I was picking his brain about issues related to infrastructure and IT. I was able to ask him where he buys computers, how he does payroll, if is he leasing or buying certain equipment. We even discussed what it is like to hire and manage Millennials. We talked about strategy. I have always found one or more ways to engage with other founders and this has been helpful.
What is next for AllthamPBC?
The soft launch of the Alltham internet site will be Fall 2015. The hard launch is scheduled for early 2016 and this coincides with the publication of a book I am writing to raise awareness on American-made products.
What are your big dreams for AllthamPBC?
I believe that Alltham can be the Wayfair of American-made products.
Harvard Business Services, Inc. would like to thank Jim Stuber for taking the time to let us interview him. If you are interested in learning more about the Public Benefit Corporation or you are ready to form your company today, our friendly and experienced customer support staff is ready to assist via phone (1-800-345-2677), email, live chat or Skype (Delawareinc).
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.