Our community is a somewhat anachronistic effort, confusing in an era of trying to squeeze out every drop in service of the balance sheet. We believe that when trying to start a company, a monumentally difficult task with an impossibly small chance of success, there needs to be a drive to cross your own personal Rubicon and smile at those dismal odds. We think one that solves pressing problems has inherent commercial potential. There isn’t an inherent political goal here, no stump to give a speech from, simply an attempt to collect the like-minded(and inspire those divergent) to commit in their efforts to fulfill their vision of what humanity could be.
When the combined intellectual and moral force of humanity comes together on a goal, inventors and investors, builders, and funders can work together to achieve the fundamental vision of humanity they share. With that in mind, a thorough discussion of some general principles of HOW to Invest with Impact provides the cornerstone to that vision.
Identifying the Right Opportunities:
The first step in “Investing with Impact” is identifying the startups that align with the goal of bringing transformative change. Look for companies working on innovative solutions in sectors such as clean energy, healthcare, education, agriculture, hardware, etc. These are industries that play a vital role in human civilization and where disruptive technologies can have the most substantial positive impact. Without metaphorically selecting the wheat from the chaff, companies that play themselves off as highly innovative or impactful(I am looking at you, the startups including AI in your non-AI space) get a slice of the fundamentally limited Invest with Impact pie.
Due Diligence and Alignment with Values:
Thorough due diligence is crucial to ensure that a startup not only has a viable business model but also aligns with the core values of impact investment. Examining the company’s mission, culture, impact on the innovation of industry in general, and potential long-term societal impact can help in determining whether it is the right fit for investment. The goal here is to find companies that aren’t superficially innovative, where their innovation is not a step-change in the technological or productive capacity of humanity but simply a “cherry on top” of their normal offering.
Collaborative Efforts and Partnerships:
Investing with impact is not a solitary journey. Collaborating with other like-minded investors, incubators, and accelerators can amplify the investment’s impact. Creating a network of partners committed to investing in meaningful ventures fosters a supportive ecosystem for startups that aim to make a difference. That is what we are trying to do with this newsletter(thanks for being a part of it!), but we hope that over time this newsletter is simply the central intersection of a community of founders, investors, and individuals committed to the progress of humanity.
Monitoring and Measuring Impact:
Once an investment is made, continuous monitoring and measuring of its impact is vital. Developing clear metrics and Key Performance Indicators (KPIs) related to the societal benefits and environmental footprint will help in evaluating the success of the investment. Regular reporting and transparent communication with stakeholders ensure accountability and keep the focus on the long-term vision. There is without a doubt a risk of a company pulling back from its focus on transformative innovation in favor of safer, more “textbook” superficial innovation. Whether this is for reasons of a diluted team or simple economic ones, the focus must be on the long-term mission that brought this company to certified Invest with Impact status to stay the course.
By following these guiding principles, the Venture Capital community can create a new wave of investments beyond merely seeking financial returns. “Investing with Impact” enables investors to be part of the solutions that address some of the most pressing challenges of our time, leaving a lasting imprint on human civilization.
It’s a call to action for all venture capitalists who aspire to be not just financiers but changemakers in a world desperate for innovation and positive transformation. Without the continual reminder from a community that knows that greater financial returns come from more impactful companies, a drought in the innovative potential of humanity becomes certain.
The purpose of this newsletter is not to belittle founders working on or investors investing in non-impactful startups but to simply raise the stature of impactful startups to that which they deserve. We’ve described companies that make the world a better place by deriving value from nuclear waste, improving our agricultural processes to make them more sustainable, and ensuring that mass starvation that could occur in one future never ends up happening.
When you think of Invest with Impact, don’t think of the culture wars that define every innovation and every issue. Think of the investors who are looking for more than a payday but a future for their children, and the builders who are trying to drag the vision of a better humanity out of their head and into the world.
If you liked this, please consider sharing it with someone else who might – the power of the Invest with Impact movement is only as great as those who know about it. Please also fill out the form to become an official Invest with Impact member(founder, investor, or member of the community) if you have not already done so. It only takes 4 minutes, and helps us make better content(Please!). If you haven’t already signed up to the newsletter, you can do so here. Nothing but quality content once per week, and never any spam. A massive thank you to Chris Robb for helping out in the construction of a far more eloquent and poignant piece for you to read this week. See you next week!
