Etsy Goes Public, Encourages Sellers to Invest in Site

The online marketplace for handmade and vintage goods went public earlier this month but put a cap on the maximum investment, with the goal of returning value back to its users.

Many social networks, like YouTube and Tsu, have engaged in revenue sharing programs with their users. Indeed, these companies realize that a great deal of their value is derived from user-generated content. It seems that Etsy, the online crafts marketplace, also realizes the value generated by its users, a fact reflected in its IPO.

Etsy CEO Chad Dickerson said in an interview with The New York Times:

The success of our business model is based on the success of our sellers. That means we don’t have to make a choice between people and profit.

To that end, Etsy has capped the amount of stock retail any one investor can buy at $2,500. This means that smaller investors, and Etsy sellers in particular, have a chance to invest in the company that they’ve essentially helped to create. What’s also interesting, is that Etsy also plans to adhere to  “B corp” or benefit corporation standards.

These standards include creating a materially positive impact on society, considering the effect of company decisions on workers, the community, the environment and shareholders, and releasing an annual public benefit report. Etsy will still be required to pay taxes, conform to other laws and it can still make profit. The purpose of a B Corps is to be a more sustainable corporation, and to define success as something more than just profit.

According to B Lab co-founder Jay Coen Gilbert:

B Corps are reaching a tipping point in market acceptance. The current shareholder model doesn’t meet the needs of entrepreneurs, business leaders and investors who want to make money and make a difference.

Etsy has until 2017 to decide if it wants to be certified as a B corp, but Dickerson says that regardless of certification, he wants Etsy to be a company that focuses on generating social good.

Other companies have tried to give to their users in the past, some successfully through revenue sharing, and some unsuccessfully like Reddit’s attempt to give users shares through cryptocurrency. At this point it doesn’t matter if Etsy doesn’t become a B Corp; they’re part of a growing trend of sites placing greater value in their users.