Impact Investing Dual-Return Strategy
Screen investments for financial returns and measurable societal benefit
- Difficulty
- Advanced
- Time to result
- ~ongoing to results
- Steps
- 6
- Confidence
- 94%
Soraya Darabi describes impact investing as a dual-return strategy: capital goes to companies expected to create a positive social or environmental effect while also producing a financial return. The process begins by defining what impact means for the investor, because an early-stage firm can choose a focused mandate rather than inherit a universal one. TMV turns that definition into sectors such as sustainable solutions, accessible healthcare, and AI that broadens access to work and wealth. Candidate companies must still satisfy venture fundamentals, including credible founders and the potential to create or reimagine an industry. The impact side is then measured alongside performance using IRIS Plus and United Nations sustainable development goals. This keeps impact distinct from philanthropy and makes both halves of the investment thesis visible to capital providers.
Origin
Extracted from Masters in Business, where Soraya Darabi explained TMV's definition, sector lens, company selection, and impact reporting approach.
Core principles
- 01Impact investing must pursue financial returns rather than substitute for philanthropy
- 02Investors should define the social or environmental outcomes that count as impact for them
- 03Impact and financial performance should be evaluated together
- 04Recognised methodologies make non-financial outcomes measurable and reportable
- 05Sector focus can turn broad values into an investable mandate
How to run it
- 1
Define the intended impact
State the positive social or environmental outcomes the portfolio should create. Make the definition specific enough to guide what qualifies and what does not.
Pro tip Choose a definition that reflects the capital providers' values rather than relying on a vague impact label.
Watch out Do not treat impact investing as another name for philanthropy.
- 2
Convert values into sectors
Select investable verticals that express the intended outcomes. TMV uses tech-enabled sustainable solutions, accessible and equitable healthcare, and AI that democratizes access to work and wealth.
Pro tip A narrow sector lens makes a broad social aim easier to apply consistently.
- 3
Test the business case
Evaluate whether the company can generate strong financial returns and whether its founders can create a new industry or reimagine one that needs innovation. Impact does not replace ordinary investment discipline.
Pro tip Look for businesses where the impact mechanism is part of the product's commercial value.
Watch out A positive mission alone does not establish an investable return case.
- 4
Verify the impact mechanism
Identify how the company's product or service creates the claimed social or environmental benefit. Connect the operating activity to an observable outcome rather than relying on branding.
Pro tip Describe the direct beneficiary and the practical change the company produces.
Watch out Do not confuse a fashionable sector with demonstrated impact.
- 5
Measure against standards
Use IRIS Plus and relevant United Nations sustainable development goals to track the impact alongside financial performance. Select measures that fit the portfolio's stated outcomes.
Watch out A self-defined mandate still needs credible measurement.
- 6
Report both returns
Communicate financial performance and measured impact to the portfolio's capital providers. Preserve the distinction between investors motivated by impact and those primarily seeking returns.
Pro tip Lead with the investment sectors when that describes the strategy more clearly than a broad impact label.
In the wild
TMV invested in Tally AI, an ambient scribe intended to help doctors reduce roughly fifteen hours of weekly note-taking and give patients more actionable access to their information. The company can be assessed as an AI venture investment while its effect on clinician burnout and patient information provides the impact mechanism.
→ One investment thesis links AI efficiency, healthcare access, and the prospect of financial returns.
Common mistakes
Confusing impact with philanthropy
Darabi explicitly distinguishes impact investing from giving because the strategy also seeks financial returns.
Using an undefined impact label
Without a specific mandate, investors cannot consistently decide which sectors, companies, or outcomes qualify.
Claiming impact without measurement
TMV uses IRIS Plus and sustainable development goals so that social and environmental results can be measured and reported.
Is it for you?
Best for
It is best for investors who want an explicit impact mandate without treating their portfolio as philanthropy.
Not ideal for
It is not ideal for investors unwilling to define, measure, and report the non-financial outcomes they claim to support.
From the transcript
“It's simply a strategy that allows folks to invest in companies that create a positive social or environmental impact while also generating great financial returns.”
“We largely leverage something called IRIS plus, sort of an industry standard these days, and it's really good for measuring impact alongside un sustainable development…”
“We invest in verticals that have founders at the helm who are you know, successful, have had a front row seat to success before, who…”
From the episode
At The Money: When Your Investments Make an Impact