We’re launching a new Impact Venture Fund and so it seemed like it would be a good idea to go back and look at the existing portfolios and determine what kind of impact investments we had already made and do an analysis of their performance relative to non-impact investments.
“What I found was that about half of our investments fell into typical “Impact” categories.”
We were investing in companies like PharmaJet because it was a great investment, had an amazing team, lots of traction, a good patent portfolio and a clear path to a good exit. But PharmaJet, which has developed a needle-free injection system for vaccines like Flu, Polio, Rabies and even Zika, had a lot of social benefits that made it an incredible Impact investment. Things like stretching a worldwide polio virus shortage by being 25% more efficient than needle injections, thus requiring less vaccine for each injection. Or by eliminating the risk of needle pricks for health care providers by eliminating the needle altogether. Similarly, because PharmaJet’s cartridges are designed for single use, there is no possibility of re-use of needles by drug abusers who would be exposed to additional health risks.
” If you look at angel and venture capital investments in general, they’re ALL Impact investments. “
While PharmaJet and many of our other investments fall clearly in the “Impact” category, I’ve observed over the years that the Impact label sometimes gets misused and abused by well meaning investors. If you look at angel and venture capital investments in general, they’re ALL Impact investments. They create jobs, generate wealth and help communities to grow. But not all investments are truly Impact investments if you use a narrower definition of investments that have measurable social or environmental impact. Examples would include EdTech companies we’ve invested in like BitsBox, that provides coding training to kids, over 50% of whom are girls, or AgTech companies like GeoVisual Analytics that move crops from field to retail with maximum efficiency and reduced waste, or solar companies like Sulas Industries that uses the power of the sun to move solar panels to increase their exposure to the sun, resulting in 20% increased output.
I’m happy to report that the Impact companies in our portfolio are performing on par with the portfolio at large, which supports our thesis that Impact companies don’t have to provide lower returns to investors just because they’re doing good in the world. We have always held that there is a solid intersection between a certain subset of Impact companies and investments with high return potentials exceeding 10X our investment over a five year holding period.
We’re investing about 50% of our portfolios in Women led companies as well, not because we set out to do that, but because they were awesome investments. Women are great business leaders, especially during the startup phase of companies where their grit, capital efficiency and collaborative leadership style tends to lead to success.
I’m looking forward to managing a fund that will be 100% Impact investments because I think they’ll be great investments, there will be measurable good done in the world, and it’s not that different from what we’ve been doing all along with the Rockies Venture Club and the Rockies Venture Fund.