Consumerization is Changing the Investment Landscape
The era of making as much money as possible for shareholders, regardless of the costs to society and the world, is coming to an end. Citizens are demanding more from the businesses they support, including their stance on social issues and their community involvement, such as environmental contributions. For-profit social enterprises are becoming more and more popular. For example, businesses like TOMS, Patagonia, Bombas, and Ben & Jerry’s have shown that businesses can make money for their investors, while also providing positive change for the world.
The Social Enterprise Model
As more businesses shift toward a social enterprise model, the investment community must also shift its focus. The new generation of investors demand more than just returns, and the venture capital world must respond in kind to make sure they are providing today’s investor preferences. Firms such as Acumen Fund, Good Capital, and Social Capital are industry success stories investing in portfolio companies that generate desirable returns for their investors, all while contributing to the like minds of younger generations helping to make the world a better place.
A Shifting Investment Focus for Venture Capital Firms
As venture capital firms migrate to investing more money into socially conscious businesses, we expect to see more social entrepreneurs step up to help solve world problems. Xcellerant Ventures believes that over time, it will become increasingly important for funds to target portfolio companies with innovative ideas and systems that are actively working toward combatting the industry wide problems healthcare is facing today.