The founder and Chairman of Vickers Venture Partners on impact investing’s role in funding a better world.
We have seen this in our portfolio performance. Since we started focusing on breakthrough technologies with social impact, our failure rate has dropped and our home runs have increased, resulting in much better and stable ROIs.
There are a few reasons for this. Firstly, there are hardly any market risks in such breakthrough investments. The demand for a cure for cancer or sustainable baseload geothermal energy is large, known and ready. Compare this to a new social app that is supposed to enthrall users in a new way — a next-generation TikTok, for instance. A crystal ball is needed to predict the success of the latter.
Secondly, since the key risk is whether the technology works, it is possible to mitigate this through good analyses of the discovery. So, our focus has been to ascertain whether the tech will work. When it does, the returns could be ten or even hundredfold as it would be the only solution to a huge problem with an unmet need.
The world’s most pressing problems are great opportunities. In our view, the financial winners of tomorrow will be those ventures that provide solutions to today’s problems.
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