

Ask HN: Why Should a Startup Operate as a Nonprofit? - pdog

In light of the news that YC will now fund nonprofits[1], why should a business or organization choose to operate as a nonprofit instead of as a for-profit company? What advantages are there to being a nonprofit? What are the disadvantages?<p>What&#x27;s different about building a successful nonprofit versus a for-profit startup?<p>[1]: https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=6341568
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redtexture
Non-profit, meaning "non-stock" corporations need capital and initial support
to get started as much as any other entity.

Clearly YC considers the investment in non-stock entities a charitable
contribution towards a (potential) good cause, and is not participating to see
a profit on their investment, but is just as interested in helping the
founders figure out their mission, and funding market.

Non-stock organizations raise money just as competitively and actively as
stock organizations, and have a community of users and donors, as well as
user-recipients.

[http://Water.org](http://Water.org) is an example of an entity that is
actively and successfully raising millions of dollars toward a their mission
and purpose, with a successful community of supporters and recipients.

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ronreiter
Obviously, the disadvantage of a non-profit is that you cannot sell shares of
the company or receive dividends from revenues the company creates. You can
only receive a salary.

If it makes sense to receive donations and to operate a non-profit, then a
non-profit start-up is something that benefits the world.

If someone wants to gain reputation and build a resume, this is a good way of
doing so.

