Ventures, and venture capital, play a significant role in defining the future. As social and environmental pressures like inequality and climate change reshape the world around us, that role is increasingly important. Ventures that address these canllenges are more commonly referred to as 'mission-driven' and are a growing movement that represent the future of venture.

The advantages of being 'mission-driven' accrue from understanding and communicating the impact that venture has on people and the planet. Here's how impact matters in the venture ecosystem today.

For supporting data and perspectives, please see References for Mission-Driven Impacts on Venture.


How Impact Matters in Venture

Impact, and how we measure impact, is concerned with outcomes from a venture's activities and outputs. In other words, it's about understanding how a venture influences the world as a result of what and how it creates and operates.

Conventionally, most non-financial outcomes are treated as externalities to a venture. As such, non-financial outcomes are not considered to have material consequences. However, in recent years, many externalities are proving, in fact, to be material, particularly where negative social or environmental consequences are evident.

Additionally, negative externalities from ventures are having knock-on effects in the form of social and regulatory pressure, as well as employee and market demand. At a minimum, these externalities pose increased risk to every venture.

At the same time, these challenges also create opportunities for existing ventures to outmaneuver competitors and for new ventures to introduce solutions that actively contribute to a better future. From both perspectives, impact awareness and action is increasingly important in the venture ecosystem and society at large.

Better, More Successful Ventures

References for Mission-Driven Impacts on Venture

While impact related action tends to be reactionary for some ventures, impact awareness increases the ability for a venture to take strategic and tactical advantage. Strategic and tactical advantages tend to accumulate and become durable as the value of the impact grows and the veracity of a venture's claims strengthen. Helping ventures understand and act on impact can provide material benefits to the ventures we engage.

Better Alpha, Lower Beta for Investors.

References for Mission-Driven Impacts on Venture

Understanding impact within existing portfolios improves the ability of a portfolio manager to identify impact related risks, create opportunities for ventures to leverage unrealized impact, and identify emerging themes for subsequent funds. For a portfolio manager, impact is a valuable new perspective that has the potential to materially reduce volatility and improve returns.