Venture capital: generate impact or push for a healthy return?  

Impact investing is rapidly transforming from a niche market into a global movement, capturing the attention of major private equity firms such as Bain Capital and KKR. While historically focusing on economic value, these investors have recently launched funds that aim to generate positive, measurable social and environmental impact alongside a financial return. Venture capital (VC) investors are also adopting an impact approach through equity investments in startups. The academic community has started to shine a spotlight on these specialized impact VCs (IVCs) in an effort to understand the differences between the impact investing model and traditional VCs (TVCs) such as screening criteria, contracting with limited partners and portfolio companies, and return generation.

With the potential to radically shake up markets and mainstream conversations around impact, several lines of inquiry emerge. Of course, many scholars are working to address the elephant in the room:…