Etsy IPO – Showing how to balance social responsibility with new profit pressures.

When it comes to an IPO, technology companies can seem to do no wrong in the eyes of investors. As we have seen in the past year or two, money has been thrown at digital companies regardless of whether or not they have actually turned a profit. And in this sense, Etsy is no different.

On Wednesday the online marketplace for arts, crafts and small businesses, which was started by a couple of guys in Brooklyn who needed a place to sell handmade wooden computers ten years ago, saw its share price close at $30, an impressive 86% up on its initial offering of $16 on the Nasdaq marketplace.

However, like many other successful ‘online’ businesses in 2015, despite having almost 20 million active buyers, sales of close to $200 million, last year it still booked a loss of close to $15 million. And as noted by the surge in interest on its public debut, this doesn’t seem to bother investors – yet.

However, what’s most interesting about Etsy’s IPO is not whether or not investors will forgive its losses going forward, at the cost of growing and scaling the business, but whether or not they will forgive losses because of its investments in continuing to be a socially responsible corporation.

Etsy is one of over 1,000 US companies that has gained B-corp certification, which aims to balance both corporate responsibility and the drive for profits. ‘Benefit corporations’ are certified by non-profit organisation B Lab and have to adhere to strict social and environmental guidelines to maintain their status.