🔒Social entrepreneurship law gains early traction; Hartford seen as hub

1 of 4

Since Connecticut created a new law last year allowing for social benefit corporations, adoption of the novel legal status has jumped out to a fast start and the Hartford entrepreneurial community is moving quickly to become a hub for businesses interested in promoting social good.

Connecticut last year joined the now 30 states that have adopted a social benefit corporation law, which grants reporting advantages and legal protections to investors and boards of directors who consider a business's community impact, rather than just maximizing shareholder value.

Since Connecticut's law was enacted in October, 42 companies have registered as benefit corporations, including 17 on the first day, according to the Connecticut Secretary of the State.

By comparison, Maryland — the first state to adopt a benefit corporation law in 2010 — had 32 companies register in the first three years of its program. Oregon holds the record for most benefit corporations signed up on the first day of registration, 29.

“The Connecticut law shows this state is on the cutting edge of this type of business,” said Spencer Curry, co-founder of Glastonbury benefit corporation Fresh Farm Aquaponics, which was one of the 17 companies that signed up on the first day of the new law. “It speaks to the people who live here that they believe in this and that they made it a law.”

Hartford hub

As interest in benefit corporations germinates, Hartford is vying to become a hub for socially-conscious entrepreneurs.

Hartford incubator reSET, for example, recently doubled its Hartford office footprint to accommodate growth in new business ventures, particularly social enterprises.

ReSET moved from its 3,000-square-foot downtown office on Pratt Street to an 9,575-square-foot office and laboratory space in the city's Parkville district. ReSet wanted to locate in a more vibrant neighborhood where entrepreneurs can not only start their businesses in a coworking space but also develop into later-stage ventures in their own offices, said Kate Emery, reSET's CEO.

ReSET's goal is to attract a startup community geared toward social benefits — rather than profits — and as the momentum grows, Hartford and Connecticut will become known as startup destinations for benefit corporations, Emery said.

“We are trying to make Connecticut the best state in the nation for benefit corporations,” said James Woulfe, reSET's director of advocacy and external affairs.

ReSET has 50 members, although Emery said she expects that to grow significantly once the new Park Street space is built out. She said the new location provides easier access to the entrepreneurial community, because it has free parking, is near a CTfastrak station, and is in a more diverse neighborhood with more affordable rents.

The organization, which has five employees, charges $30 for a membership, $250 if a company wants a permanent desk in the coworking space, and $500-$700 for one of the six private office spaces.

In addition to legal services offered to reSET members by Hartford law firm Murtha Cullina, the organization also provides accountants from Glastonbury's Fiondella, Milone & LaSaracina, and has an entrepreneur-in-residence to help guide early-stage startups.

Eleven companies have registered as social benefit corps this year, according to the Secretary of the State's Office, but Emery said she expects the number will grow.

ReSET's annual Impact Challenge, which is a contest that provides funding to social ventures, more than doubled its applicant pool this year from 75 to 160, a sign that there are many more socially-conscious businesses in the development pipeline. The total prize pool also is expected to double from $50,000 to $100,000 by the time the winners are determined in September.

“We are trying to create an economy [leveraging] the implementation of the benefit corporation law,” said Benjamin Simmons-Telep, reSET's program manager. “We want to create the Silicon Valley of social enterprise.”

Social good

Fresh Farm Aquaponics was one of the first 17 companies to become a Connecticut benefit corporation. It grows vegetables and raises fish for food consumption using a system in which the fish fertilize vegetables and the vegetables clean the water for the fish. The company's stated social benefit is providing food to underserved populations.

Other Connecticut-registered benefit corporations include Farmington tech firm The Walker Group, which was founded in 1985; the West Cornwall Publishing Co., which seeks to provide parity between author and publisher; and Hartford tech firm Blueprint for Impact, which provides data to nonprofits.

Fresh Farm Aquaponics will become the first company to graduate from reSET's coworking space. The company is moving into its own offices on the second floor of reSET's new 1429 Park St. location. Fresh Farm is building several versions of its aquaponics systems to showcase to potential customers. The company has 12 systems installed throughout the region.

“We will be doing different types of workshops here as well,” Curry said. “We are trying to make the farming as easy as possible.”

The Fresh Farm space is one of six offices that reSET will start leasing out to companies on July 1.

The new reSET space also includes a media lab to provide technical equipment for companies to market their business.

Murtha Cullina lawyer David Menard, who provides legal services for reSET companies, said reSET is one of the premier organizations in Connecticut involved in social enterprise.

“We need to make the startup community really something that the rest of the nation looks up to,” Menard said. “ReSET is taking the lead in that area.”

CORRECTION: A previous version of this story had the incorrect square footage for the reSET space in Parkville, as well as incorrect pricing for its coworking space.

Read more

Advocates aim to broaden benefit corporation law