Economists discovered the firm as a serious object of inquiry only a century ago when Ronald Coase famously asked, why firms exist at all. Firms were benchmarked against markets, which gave us transaction cost economics and the incompleteness of contracts as foundations for the theory of the firm. In effect, firms were reduced to substitutes for markets rather than alternative modes for the organization of socioeconomic relations. NCEs require a different theory of the firm that is aligned with theories of organizations more generally.

Finance is a critical ingredient for all enterprises. It is well established that early on most rely on family on friends, and occasionally on local banks. Scaling size and operations, however, often requires external funding in addition to retained earnings. NCEs face the dilemma of securing funding but without relinquishing control of their mission or preferred governance structure – a task that is not impossible, but difficult in the existing ecology of finance.

NCEs can and do use many different legal forms to organize their operation and governance. The plurality of forms sets them apart from the highly standardize business corporation, but creates challenges of its own in terms of legal costs at the founding moment, scalability, and mission control. Case studies, including recent examples such as Patagonia or OpenAI, will be used for illustration.