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Should Your Start-up Be For-Profit or Nonprofit?
Years ago the line between nonprofit and for-profit enterprises was clear, but that has changed. Nonprofits now offer products that compete with those of the best for-profits, and for-profits can deliver as much social value as charities. Despite the blurred distinction, all mission-driven start-ups will eventually face a stark choice about which legal structure to adopt, and they need to make it carefully, because it's hard to undo, say the authors, the CEO of a nonprofit accelerator and a partner in an impact investing fund. To guide their decision, social entrepreneurs should examine several questions: Is the market ready for a for-profit solution? Where is the available capital? And which structure would help the organization attract the talent and resources that it requires?