In our day-to-day practice at Apex Law, we are lucky enough to come into contact with many social entrepreneurs who are seeking advice on how to structure and implement their socially motivated business. Now, generally, this conversation starts with a discussion of what business entity is best suited for a particular venture. Should it be “for profit” or “non-profit.” Should it be an LLC? A Corporation? What about one of the new hybrid entities such as the Social Purpose Corporation or Benefit Corporation? All of these questions are crucial to any socially motivated business and getting the proper set up before launching any social endeavor can help a young company get started smoothly.
There is, however, something that I always point out to anyone asking about social entrepreneurship – no matter what your social purpose is, it’s all about the people involved and the recipe they have for running the business and maximizing social impact.
What I mean by that is most of “legal” issues surrounding social entrepreneurship are peripheral. Important, but peripheral. The reality of it is that you can be a socially motivated company no matter what structure you have adopted. A company, at its core, is the creation of those individuals that incorporated it. If they are in lock step with one another on their social purpose and work together to bring their social impact to the community – they will succeed.
I sometimes run across companies that I would define as social enterprises – even if they have not specifically labeled themselves as such. Companies whose core values further social purposes and whose business practices maximize the impact of those purposes on their community. By way of example – meet Love of Jojo, Inc. and Jolene Collins, maker of Jojo’s Sriracha.
I stumbled across Jojo’s sriracha randomly a few months ago, with a video about Jolene Collins and her motivation behind creating the company (video below -note some NSFW language). Essentially Jolene decided to take refined sugars out of her diet, and was therefore forced to start making all of her favorite foods at home – starting with her favorite condiment, Sriracha sauce. That evolved eventually to where she is today, creating Jojo’s special batch Sriracha. My wife and I have ordered Jojo’s Sriracha and have enjoyed the unique flavor of our special batch Sriracha (we got batches 17 and 19 I believe. Both were delicious but 19 was our favorite).
Now, as I mentioned above – some social enterprises are not specifically designated as such. They are not incorporated as Social Purpose Corporations or Benefit Corporations or as non-profits, but their mission statements and actions make clear that they are in fact socially motivated businesses. Love of Jojo inc. is one such company. Love of Jojo Inc. is a for profit company, formed and domiciled in the state of New York in 2012. For all intents and purposes it shares the same entity structure as any of the thousands of for-profit corporations currently registered in New York. If, however, you look at how Love of Jojo’s Inc. operates, and the mission statements and methods through which it carries out its business plan – it is clear that social impact is embedded in Love of Jojo Inc.’s DNA.
Jojo’s sriracha was born out of a desire to create a diet without refined sugars. Jolene uses all natural ingredients and does much of her shopping at the local farmers markets. When shipping out orders – biodegradable materials are used whenever possible. Love of Jojo’s Inc. has an identified social mission of better health for the individual and the environment. But that’s not where the connection with Social Entrepreneurship ends.
To scale her operation – Jolene turned to Lucky Ant, – a website that helps small businesses grow by raising funds from the community. Through a community based fund raising campaign, Love of Jojo’s Inc. was able to raise $4,430.00 to use towards new equipment that would help increase production. This method of fundraising is similar to Kickstarter, but Lucky Ant brings an increased emphasis on local community. Here in Seattle a company named Community Sourced Capital is taking this model as well, assisting local small businesses with community-based financing . These community based funding and financing platforms can have a huge social impact on small businesses. They assist by allowing the local community to step up with funding or financing to help grow a company. This in turn benefits the neighborhood and the very people who funded the small business, with the increased production and revenue generation that is possible with new equipment, better marketing, or whatever use is designated for the community raised funds. Many organizations everywhere are adopting efforts towards social causes, whether it be helping out local schools in procuring equipment for science-based research, funding sustainable solution providing companies, or any other cause that drives change for the betterment of society. The Chipotle restaurant brand can be taken as another example of what businesses can do to help out; it has a community fundraising wing that helps out with online fundraisers and social awareness for a number of causes. In the case of Love of Jojo, inc., the Brooklyn community stepped up with $4,430.00, a relatively small amount in the world of financing, but an amount that allowed Jolene to obtain new equipment necessary to increase production. Increased production means greater revenue generation, and greater revenue generation means more money coming into the neighborhood and the local economy. Everyone wins. A rising tide raises all ships.
In addition, Love of Jojo’s pays it forward in some respects when it comes to supporting local businesses. Many of Jolene’s special batch sriracha’s are made to commemorate or honor a friend or family member. When these batches are made they are not stamped with a batch number, but with a special stamp created for that batch. Love of Jojo’s uses Casey’s Rubber Stamps, located on the lower east side of NYC. For each specially designated batch of sriracha, Jojo’s calls attention to the stamp and includes a statement, “We had our custom stamps created by Casey’s Rubber Stamps of the Lower East Side – they use Real Red Rubber and mount on Maple. We like how they roll and are happy to support them.”
All in all – Love of Jojo’s hits almost every benchmark of social entrepreneurship. They are socially motivated through their health and environmentally sensitive practices. Love of Jojo’s also relied on their local community to crowfund new equipment to help with scalability, and in turn, utilize local businesses in their neighborhood with their product. Despite the fact that they are not incorporated as a Benefit Corporation or Social Purpose Corporation – they are everything that a social enterprise should be and a great example of how the social entrepreneurship movement is more about the people involved and their recipe for maximizing social impact, then the designated structure of the business.
Note: I have never met Jolene Collins or anyone at Love of Jojo’s Inc., and have no connection to the company. I happened upon their company by chance through a food blog that my wife likes and we have enjoyed the sriracha sauce that we have ordered from them. What drew my attention to Love of Jojo’s was that manner in which they conduct their business. Dealing with Social Entrepreneurship as much as we do at Apex Law, I have learned to spot those companies that have social missions – and who are ‘walking the walk’ so to speak. While Love of Jojo’s inc. is a for profit company – it is a blueprint for those companies and individuals who are seeking to make a social impact in the business world.
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The article provided above is for general information purposes only and should not be relied on as specific legal advice. This article does not form an attorney-client relationship. If you have any questions about this article, please feel free to contact Eric J. Camm at Eric@apexlg.com