Why venture capital should be at the heart of family office impact strategies

Impact investing is a top priority for family offices, yet defining an approach that will ‘do good’ and drive returns is fraught with challenges. However, if you’re committed to venture investing, there’s a strong argument you’re already making an impact in several ways.
venture capital impact investing

What you need to know

  • Two-thirds (66%) of European family offices are now engaged in ‘sustainable investing’, up from only a third five years ago.
  • But defining a strategy and approach isn’t easy, with numerous claims of greenwashing now surrounding ESG, impact and sustainable investing.
  • At a time of numerous global challenges, VC is one clear way to make an impact, by boosting productivity, developing better, cheaper products, preventing abuse of market power, increasing market resilience, and empowering individuals.
  • VC has a history of making an impact, from developing trade during medieval times to driving the tech revolution. It also directly supports environmental and societal goals.
  • It isn’t just about money, VCs also provide valuable support to entrepreneurs to help them build better companies, faster. A strategic approach is required to ensure success.
  • Making an impact has always been part of family offices’ DNA. Now, they should keep venture front of mind when planning their impact strategy for the future.
Venture Capital Updated on January 16, 2024

Impact investing is one of the hottest topics in finance, and doing “good” while achieving healthy returns is at the top of most family offices’ agendas. Research shows that two-thirds of European family offices are now engaged in ‘sustainable investing’, up from only a third five years ago. Family offices are investing an average of 36% of their portfolio in sustainable investments, with plans to increase that allocation over the next five years.

But, despite its popularity, impact investing, also known as sustainable investing, or ESG, has come into its share of criticism in recent years. Defining what constitutes ‘doing good’ is notoriously difficult, as is measuring how far you have succeeded. This has led to widespread criticism around how much impact specially designed investment funds are really having. Reports of greenwashing are now commonplace in financial media.

For investors, including family offices, it’s easy to tie yourself in knots trying to define your impact or ESG strategy. But, if you’re already investing in venture capital, there is a strong argument that you’re already doing it. While VC might not immediately spring to mind when you think of impact, by supporting entrepreneurs tackling some of the world’s most pressing problems, VC is the original impact investing; VC investments are inherently impactful. So, family offices should consider this when planning their own impact strategies.

About the Authors

Kjartan Rist

Kjartan Rist

Venture capital investing

Kjartan is a Founding Partner of Concentric, the London & Copenhagen-based venture capital firm. He helps family offices gain a better understanding of VC investments and how to allocate towards this.

Connect with Kjartan Rist

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