Hatcher's dealflow and third party transaction data were examined to assess the impact of Hatcher's "impact" choices on investment returns. This review includes both ESG (overt sustainability) and impact. We discovered that the investments that are influenced by impacts are significant higher multiples .
We conclud that the Impact strategies are most likely to yield accretive returns compared to typical early-stage investment strategies. This article examines series A and prior investments. Hatcher is the main center of Hatcher's operations and there are enough transaction volumes for analysis.
Our analysis examines the change in valuation across a time window, as valuations change, not necessarily a realized value since most investments do not realize their value within the time frame. We take the time elapsed as the relevant signal and discount the current valuations (possibly even to zero)
The following chart illustrates the effect. The chart below is a summary of one data source, that includes the early stages of rounds, recent investment timeframes, and the 5-year timeline. This website is an illustration of the performance of every view we looked at. The results are subject to change in view parameters and are therefore highly sensitive to changing scenarios.
Impact vs. Non-Impact Investor
This review has many confounding factors. We aren't aware of the intentions of investments individually, however we approximate Impact investment performance versus the investment pool that is complementary.
There are signs that Impact investors might be drawn to towards companies with traction. That is, they are more likely to achieve better results and pay higher prices, but this can reduce gains for portfolios. However, the aggregate performance is higher for 'impact touch' companies, on both a valuation multiple and longer-term basis.
We studied high-frequency venture capitalists who made explicit mentions of "impact" on their websites. We eventually identify a substantial amount of investments in our database by labeling them as high-frequency investors. We also identified investments as having an impact investor, or a mix, which is a 'known' non-impact investment, or both.
It is impossible to accurately identify individual investments since this is not an analysis of all transactions at a given moment. It's only a small sample, however, and investors who recently have included impacts in their plans tend to be more favourable to impact.
Other factors are involved than the specific purpose and kind of investor. The greater self-selection and examination that is associated from aligning with the goals of impact even on a fuzzy basis, results in a greater focus on feasibility, scalability as well as team composition. These are just a few aspects that could affect valuation trajectories. Additionally, many impact investment themes may have a high intrinsic yield.
In sum, the aligned focus on impact investment and investee return multiples is very strong. In the medium and long term, this encourages positive feedback in impact investing which can further amplify impact objectives.