December is also a month in which investors are making investments, balancing
portfolios and taking profits and losses for tax purposes.
This is a time for investors to be asking themselves whether they can accomplish their
philanthropic and investing goals at the same time.
Impact investing has become increasingly popular not only for foundations and family
offices, but also now for individuals.
What is “Impact Investing?”
The term Impact Investing has been coined to describe investments that have social or
environmental impacts in addition to the economic impacts for the investor’s portfolio.
There has been much debate about what constitutes an Impact Investment though,
since even the most profit minded investment may help communities with job growth
and possible environmental benefits. Sophisticated impact investors typically use
metrics to evaluate the potential social or environmental impacts, and individuals have
access to these as well, though individuals more often rely on a gut feeling to tell them
which investments they prefer.
Another debate in Impact Investing circles is how much, if any, reduced profit
expectations should the investor have when making impact investments. Corporate
investors and CSR (Corporate Social Responsibility) programs have developed
sophisticated guidelines for balancing the costs of social and environmental impact with
expected financial costs or returns. They use a “Triple Bottom Line” system to measure
social, environmental and economic impacts of their decisions. Individuals may use
their own guidelines that may apply to all impact investments they make or which may
be applied on a case by case basis. I have seen everything from “I’m just hoping to get
my money back some day” to those who show preference for impact investments, but
who also expect the same types of returns relative to risk that they would see on the
rest of their investment portfolio.
At Rockies Venture Club, we hold an impact investing event on the second Tuesday
of every December. We recruit expert speakers on the topic as well as four impact
companies seeking early stage investment. The criteria we use are very close to those
that we use every month when evaluating venture companies for investment. The
companies should have experienced and capable teams, a disruptive technology,
product or service, and a substantial market demand. The outcomes we’re looking for
include an “exit” for investors within about five years with a potential return of up to ten
times the original investment.
Rockies Venture Club also supports EFCO (the Entrepreneurs Foundation of Colorado)
Which helps start ups to donate one percent of their founders stock to community
organizations. In this way every company that achieves a successful exit can be an
To learn more about impact investing and to meet the founders of four great impact
companies, consider attending the RVC Impact Investing event Tuesday, December 10th 5:00-7:30PM at the Colorado State University Denver Center Event Atrium 475 17th Street, Suite 200 Denver, CO. Click Here to Register