Part 3 of a 3-Part Series on Common Myths of Social Impact Investing
An Op-Ed by our Founder and CEO, Andrew Vo
❌ Myth #3 - Social Impact Investing is a Theme
Need a little “Feel Good” position in your portfolios?
Then buy an ETF or private equity fund that makes “social impact” and will “make the world a better place” - a common strategy used by Private Equity and Venture Capital fund managers during their pitch to investors / LPs like pensions, endowments and foundations.
The bad results being poor investment returns - after paying Private Equity fund managers and Venture Capitalists billions in Management Fees - that are worse than simply allocating to an S&P 500 ETF at almost no cost (<5 basis points).
So what is Social Impact Investing?
Social Impact Investing is really Diversity Investing, defined below.
Within the context of Venture Capital, Diversity Investing is the value-added benefits of combining complementary Founder Backgrounds and Life Perspectives to build exceptional early-stage businesses.
So the next time you hear any of these myths about Social Impact Investing from your investment colleagues, please tell them why they've misunderstood.