Ello is sure to cause a commotion today and not because the Boulder-based social networking site went viral a few weeks ago.
First, the start-up got its first round of funding, raising $5.5 million from a group of investors led by Foundry Group (see ), Techstars’ Bullet Time Ventures and FreshTracks Capital.
And then it today converted to a State of Delaware Public Benefit Corporation (PBC), in which Ello pledges 3 things:
- Ello must never make money from selling ads
- Ello must never make money from selling user data
- In the event that Ello is ever sold, the new owners would also have to comply by these terms
What does that mean? “The makes it legally impossible under US law for investors to require Ello to ever show ads, sell user data, or sell the company to any buyer who would violate any of the listed conditions,” the company said in a statement.
All along, co-founder Todd Berger has said Ello is ad-free and will always be. It doesn’t track users, and it doesn’t care to. But skeptics were everywhere, which is probably why Ello converted to a public charter.
While you would think this would greatly limit potential revenue and financial growth, new investors apparently don’t think so.
“Signing the Ello charter was a no brainer for us as investors,” said Mark Solon, Managing Partner at Techstars. “We believe in the mission and the PBC further enforces the manifesto, and Ello’s vision to never market their users to third parties.”
Ello co-founders Todd Berger and Lucien Fohr at their Boulder office.
Confused about Ello? A few steps to get you started.
Berger told me in a that Ello is definitely a business and will eventually begin charging for certain features, like more profile customization. It will definitely be an interesting experiment to survive in this commercial-heavy, very public world. ()
More links to read:
To view the Ello Charter Letter signed by its investors, click here:
To learn about Public Benefit Corporations (PBC), click here:
To view Foundry Group’s blog post, click here:
To view Seth Levine’s blog post, click here:
To view Mark Solon’s blog post, click here:
