TLDR:
– Impact-focused venture capital funds can produce comparable returns to non-impact funds and lower risks
– Impact-aligned industries such as healthcare-life sciences and climate-clean technology are predicted to outperform other sectors
Ethan Finkelstein and Dahna Goldstein conducted research on impact-focused venture capital funds, comparing their performance to traditional VC funds. Their analysis showed that impact funds can produce returns comparable to non-impact funds and even outperform them in some cases. Impact funds were found to have a lower beta, reducing overall portfolio risk for investors. Additionally, industries aligned with impact investing, such as healthcare-life sciences and climate-clean technology, are predicted to outperform other sectors in the coming decade. The authors hope that as more data becomes available, sustainable investing will see greater investment, leading to solutions for societal and environmental challenges.
