Flexible Low-Yield (FLY) Paper: Capitalism and Idealism

Brooklyn Law Professors Steven Dean and Dana Brakman Reiser have co-authored and posted a new article on SSRN. Titled Hunting Stag with FLY Paper: A Hybrid Financial Instrument forSocial Enterprise, the article is due for publication later this year in volume 55 of the Boston College Law Review. The abstract for the article reads:

Social entrepreneurs and socially motivated investors share a belief in the power of social enterprise, ventures that pursue a “double bottom line” of profit and social good. Unfortunately, they also share a deep mutual suspicion. Recognizing that social ventures — just like traditional for- and nonprofit enterprises — need capital to flourish, this Article offers a financing tool to transform that skepticism into commitment. Unlike the array of new entities that have emerged in recent years — including L3Cs, benefit corporations and flexible purpose corporations — the hybrid financial instrument it describes provides a robust and transparent solution to the puzzle that lies at the heart of every social enterprise: how to blend a profit motive with a social mission. Recognizing their shared dilemma as an example of what economists call a stag hunt, FLY Paper strikes that elusive balance by allowing investors and entrepreneurs to credibly signal a reciprocal commitment to the pursuit of a dual bottom line.