Capturing today’s opportunities requires a clear understanding of the drastic changes that are presently restructuring our economies and societies. The acceleration of scientific and technological progress, the focus on sustainability and responsibility, the quest for purpose, and the massive demographic shifts are changing the shape of tomorrow’s populations. Investing in these types of opportunities similarly requires a change in the ways in which we look at potential investments.
One crucial change needed is a more specific and holistic view of how value is created today. Instead of thinking of “value” exclusively as “market value”, we believe that value is created when a complex combination of factors come into play and mutually reinforce each other. These factors are the human, scientific, market and social value. Our goal is to account for each of these four variables, and this approach is clearly reflected in our investment thesis:
We invest in bold leaders (1) that use advanced technologies (2) to solve massive global problems (3) stemming from social and environment challenges (4).
(1) When we think of human value, we think of bold leaders – exceptional founders with an “anticipative” vision of the future. These are long-term thinkers, ambitious inventors and focused executors, and they have unique capacity to shape the teams and enterprises that can bring about transformative changes.
(2) Scientific value for us means tackling the potential of advanced technologies. The new wave of entrepreneurs use advances in deep technologies to solve global problems. We see these companies as the greatest value creation opportunities over the next decades and are proud to support them.
(3) Market value is captured in the global nature of problems of today. The rapidly aging population, the growing middle class and the increasing number of Internet users worldwide present demographic changes of gargantuan proportions, which will, no doubt, reshape the demand. Our goal is to support the businesses predicting and harnessing these new trends.
(4) Finally, the social value for us lies in addressing social and environment challenges. We invest into the startups with a clear goal of improving the human and planetary condition.
New strategy to address the new challenges
We see the new challenges the world faces today as some of the greatest opportunities for entrepreneurs and investors alike. In order to tackle these opportunities, Impact Venture has shaped its strategy accordingly. Here are the five strategic guidelines that define our approach to investment:
1) Generalist. We are generalist in our investment approach. Many of the most disruptive ventures exist at the intersection of various industries. Setting the industry assumptions aside, we simply start from the first principles with each company: assess what it does now, what value it provides, whom it serves, and whom it could serve. The very best startups create new markets, or even completely new industries.
2) Deep Tech. We back early-stage entrepreneurs applying deep tech to transform giant industries. From unsustainable global manufacturing, to an over-stressed global food supply, to seemingly incurable diseases, we see some of society’s biggest challenges as some of the world’s most compelling business opportunities.
3) Disruption. We invest primarily in companies with traction signals indicating that a disruptor technology is at play. Technological development isn’t merely unfolding; it’s accelerating. No industry will be immune to the onslaught of digitization.
4) Traction. We focus on «traction signals” and we are interested in startups that are already disrupting. The two hallmarks of disruptive traction are a 10x improvement on status quo solutions (i.e. not just an incremental improvement); and an exponential growth curve (ideally in revenue, but could also be in users, impressions, growth).
5) Investing in What We Understand. Warren Buffett was right, investing in business models that one doesn’t really understand is asking for trouble. We take great pride in investing in startups with surprisingly simple business models – often with hardware, or other «real-world» dimensions to their business.