Impact Investing unites the head and heart of startup investors
I’m always reflective at year end. Why do I do, what I do? At @OurCrowd my job and passion is to support entrepreneurs to achieve their vision and enable investors to join me on the journey.
But why? Because these startup entrepreneurs have the courage and hubris to believe they can impact the world. By investing in these ideas we can deploy capital for both purpose and profit.
In the investment world — like all industries — this has a name — Impact Investing. The term was coined in 2007 by the Rockefeller Foundation who has championed this movement.
“Put simply, impact investments are intended to deliver both financial returns and social and environmental benefits,” explain Margot Brandenburg and Judith Rodin (President of the Foundation) in the new book The Power of Impact Investing. “If we are to have any hope of solving the increasingly dynamic, complex, and messy challenges of our time, we need more investors to take this dual approach to investing.
Mind you, you should never sacrifice profit for purpose. However we can add the criteria of impact into our personal investment consideration. Ask, can I make money and then, will it have a positive impact on the world?
We are facing urgent challenges of poverty, environmental crises, health and climate change, domestically and around the world. Neither government, nor philanthropy, even combined, is equipped to solve these problems alone.Entrepreneurship unleashed is powerful.
We all know how to make smart investments. We know how to maximize returns. We know how to make money, but it’s the time to enable part of our portfolio to have more purpose, more power, more impact.
It’s charitable to donate; but it’s transformative to invest in the future you want for our children’s children.
As 2015 comes to a close, OurCrowd.com and our members are investing in four technology startups that all have social impact. One — a sustainable agriculture company that increases crop production and saves water; two — a company saves energy and improves air quality in commercial buildings; and three — a mobile digital health platform that prevents diabetes.
These startups have heart — a deeper vision beyond making money.
Does your head make the investments and your heart give it away? If yes, then it’s time to unite your head and the heart. As a startup investor, you can do well by doing good.
To learn more about Impact Investing check out the Case Foundation’s Short Guide to Impact Investing.
For 2016, tell me what you want to invest in that makes an impact.