1. Positive impact AND positive returns? You betcha! Funds investing for social and environmental purposes CAN have positive impact AND positive returns.
  2. Financial-first or impact-first? It’s BOTH! We weight social and financial returns equally.
  3. You want me to measure impact? How do I do that? Measuring social impact is not only possible…it is essential for selecting and managing a portfolio of early-stage impact companies.
  4. Going, going…staying? Social ventures have higher staying power than their non-impact early-stage peers.
  5. Diversify, diversify, diversify. Like in traditional investing, portfolio diversification is key.
  6. Know thy co-investors! In impact investing it is important to understand the different due diligence and post-closing capabilities of co-investors.
  7. The three “R’s”: risk, return, and revenue. Pre-revenue companies take a lot more investor time and should be kept to a smaller percentage of the portfolio.
  8. “We’ve perfected the product. Now we just need $25 million.” High capital expenditure business models can be difficult to finance, so be selective.
  9. Aim high and make sure you have the gunpowder to fire the cannon. It’s important to have dry powder for the life of the fund to double-down on the emerging winners and have defensive capital when needed.
  10. You made the investment — now the work begins. True value-added time spent with portfolio companies leads to better follow-on investment decisions and higher positive impact and positive returns.

Read the full article on impact investing at ImpactAlpha