IMPACT Strategy

WE INVEST IN COMPANIES THAT OPTIMIZE BOTH FINANCIAL AND SOCIAL RETURNS.

Specifically, we invest in companies that create positive impact through the product they sell, because we believe that’s one of the strongest ways to create alignment between scaling impact and revenues.

We focus on three impact areas that we believe best allow for that alignment:

  • Economic Opportunity: Improved quality of and access to jobs, career paths, affordable financial products and planning tools, and affordable housing. We also focus on improved education outcomes and access in early childhood, K12, higher education, and lifelong learning.

  • Environmental Sustainability: Better conservation and management of water, energy, carbon emissions, and waste

  • Health Equity: Improved outcomes and access to healthcare, particularly for underserved populations

We look for evidence of impact and alignment of impact with financial success from the very beginning of our process. In addition to performing due diligence on the company’s potential for impact alongside other business considerations, we construct an impact thesis for each investment which describes the positive social outcomes we hope to achieve with the investment. As part of that process, we develop a set of impact metrics (related to scale, effectiveness, and accessibility) that our portfolio companies will report to us alongside their financial metrics.

When we are ready to make an investment, we ask each of our investees to sign a mutual impact commitment, aligning our joint interests in both social and financial return and committing to report the impact metrics we have agreed upon. As investors, we create value by helping management teams to grow their companies in a way that prioritizes impact, and we help identify other mission-aligned investors that share this commitment.

“Product” is just one of the ways that we believe impact investors can intentionally create impact, along with 4 others (people, place, process, and paradigm), which we describe using the 5 P Framework. 

Although impact investing and ESG investing are very different strategies, we believe that, at their best, each incorporates the other, and we accordingly seek to manage ESG in various ways in our portfolio. A great ESG strategy will take into account the impacts of the products that are being sold, and a great impact strategy will take into account that a business’s impacts go well beyond its product, especially as it scales.