(LinkedIn) This movement became more mainstream just under ten years ago. At this time, the entry of several large players gave the socially conscious business and investment movement the tailwind it lacked. Players like Bain Capital and then TPG Capital launched impact-focused funds. Larry Fink, CEO of Blackrock, issued his first statement on stakeholder capitalism, which was heralded as an undeniable indicator of a changing tide. Then in 2019, 181 CEOs issued a jointed statement through the Business Roundtable on the Purpose of a Corporation to promote an economy that serves everyone and clearly laid out the case for stakeholder, not shareholder, capitalism.
And yet, stakeholder capitalism – a system of capitalism in which corporations are oriented to serve the interests of all their stakeholders, not just their shareholders – has not been an everyday concept in the entrepreneurial sector. This could be because startups are resource constrained and must focus on hitting the next milestone to survive, or because their key source of capital – venture capital firms – are highly incentivized to achieve large financial exits as quickly as possible. However, in 2022 stakeholder capitalism should and will enter the venture dialogue.
At MassChallenge, we work across the innovation economy – with founders, funders, industries, academia, and governments from around the world. We have a unique view watching founders build conventional and unconventional companies, across industries, sectors and geographies. And while we are most certainly in the early days, there is a subtle and not-so-subtle shift in the dialogue and approach that suggests stakeholder capitalism is coming downstream.
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