Hatcher's dealflow and third party transaction data were analysed to determine the effect of Hatcher's "impact" choices on the return of investment. In this analysis, we are using the concepts of impact and ESG together. We found that impact-influenced investees appear to have significant higher multiples.
These results suggest that Impact strategies may be more accretive than the traditional early-stage investment strategies. This post will focus on series A as well as the earlier investments. Hatcher has sufficient transaction volumes that we can analyze these strategies.
The analysis looks at the changes in valuation over a time period. However, valuations are able to alter, but they don't necessarily reflect the value realized since most investments fail to realize their full potential within the time frame. We eliminate the most recent valuations (possibly to zero) based on the elapsed period when no further relevant signals are detected.
Below is a graph which illustrates this phenomenon. The chart below is the summary of one look that includes early stage rounds and more recent investments. It also features a 5-year time frame. This provides an example of the overall performance across every view we looked at. However, these numbers are highly dependent on changes in the parameters of view and specific to the scenario.
Impact and Non-Impact investors against. Non-Impact
This report is not exhaustive without confounding factors. Although we don't have the ability to assess the value of each investment, we recognize that the performance of Impact investment is comparable to that of the complimentary pool.
There is evidence that suggests Impact investors are drawn to companies that are gaining traction. They usually pay a fee to offset portfolio gains, and thus invest in the potential for scalability. In a valuation multiplier basis however, the total performance of companies that have been 'impact-touched' is higher both in the short - and long-term.
We found high-frequency venture investors that explicitly refer to "impact" or have similar objectives. We eventually labeled a large number of investments by tagging high frequency investors. We identified the investments as with a "known impact investor' or blend either.
It is difficult to accurately identify individual investments since this is not an analysis of the transactions happening at any given time. However, it's only a small sample of data and investors who have included impact themes recently tended to be more Impact-friendly in their earlier strategies.
There are many aspects that go beyond the original objective and purpose of the investment. It is likely that greater focus and self-selection while aligning with your goals for impact leads to greater attention to scaling, feasibility and team composition as well as other elements that may impact valuation trajectories. Furthermore that Take a look at the site here some of the impact investing topics are likely to have a substantial intrinsic return, too.
In the end the focused focus on impact investing and return on investment multiples for investors is extremely effective. This creates positive feedback in impact investment which further boosts impact goals.