Ello, the fledgling social network that has vowed not to run advertising, doubled down on that sentiment on Thursday by making itself a Public Benefit Corporation and putting the sentiment in its charter. A PBC’s charter can’t be changed even if the company is bought and investors can’t force the company to do something that goes against its charter. “It says that the co. exists for public benefit,” says Paul Budnitz, CEO and co-founder of Ello. “No investor could ever force us to do those things.” Other well-known PBCs include Patagonia, Warby Parker and King Arthur Flour.
Ello exploded in popularity last month partly on the grounds that it would remain ad-free and never sell users’ data, and today it’s putting those promises down in legal writing. Ello says that it has converted to a public benefit corporation, with its charter prohibiting it in “the strongest legal terms possible” from making money by selling ads or user data. It also requires that any company that might purchase Ello in the future follow these same rules. “In other words,” the company writes, “Ello exists for your benefit, and will never show ads or sell user data.” While Ello doesn’t publish the exact language used, the idea is that as a public-benefit corporation it has to serve both investors and non-investors alike — that way, it won’t always be thinking about money. The move comes in response to vocal concerns that Ello will eventually be forced to give up on its promise as it answers to investors, who had already put $435,000 into the company by the time it received a flood of new users.
