Structure Labs: Perfect For Tax Season

by Nathaniel Whittemore · 2010-01-02 19:57:00 UTC
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With the hubbub of the holidays safely behind us, it's the time that most Americans turn to their least favorite holiday season: tax season! While individuals are deciding between HR Block or TurboTax, however, many social venture startups are trying to figure out just where they sit between nonprofit and forprofit. Criterion Venture's new "Structure Labs" are designed specifically to help organizations best leverage a changing legal landscape for for-good organizations.

The questions the Structure Labs are addressing are vital. Many social ventures I've run into that have an explicit and clear revenue stream, but a social motive that trumps pure profit maximization, find themselves wondering how to find the structure that most accurately captures their mission and revenue strategy.

The question of whether to be a for-profit, nonprofit, hybrid, or some new model like the L3C first tend to come up as entrepreneurs try to figure out what sort of funders they're looking for. As I wrote in my prediction post a few weeks ago, I believe there is a general perception that startup nonprofit funding is easier to come by - or at least, between web widgets and online contests, more in the control of the founder - than socially-minded for-profit venture funding. I think this perception biases young organizations towards the not for profit structure, even when there may be compelling reasons for them to be for-profit companies.

The idea of Criterion's Structure Labs is not to bias founders toward one structure or another, but to lead them through a question asking process that can help them better understand how their own priorities align with the tradeoffs involved in any decision. They actually use a game to simulate decisions, which I'm sure helps with the hours of legal detail.

The first Labs have only just happened, and in the next six months, they will be held in about a half dozen cities around the country. If you're a founder in a city other than those that Labs are scheduled, you have the opportunity to host your own.

Check out Criterion Ventures for more information.

(Photo: Tony the Misfit)

Nathaniel Whittemore is the founder of Assetmap. Previously he was the founding director of the Northwestern University Center for Global Engagement.
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