What Should Investors Know About Social Ventures?

Abstract

The so-called “social” ventures or “socially responsible” ventures have grown in number and popularity in recent years. Yet they still remain a mystery for most investors as to what their objectives are and whether they are worth the consideration for investment. The article examines some of the key questions financiers have about social ventures, e.g., extent of their profit-orientation, inclination toward raising capital, and preferred strategies for exits. In addition, we analyze several key management practices of social ventures, with particular attention to those activities that impact the companies' financial performance.

TOPICS: Private equity, ESG investing, performance measurement, technical analysis