Startup Boards — Primary vs. Secondary Impact Investing
In impact investing, there is primary impact and secondary impact.
Primary impact comes from the company pursuing its mission.
You measure it based on the effect the business has on the cause it supports.
For example, how many students improved their scores.
Secondary impact measures how the company carries out its mission.
Certified “B” Corporations are an example of this. For a company to qualify as a “B” Corporation, it must achieve metrics in green practices, diversity, pay, and more.
These companies often use secondary impact data to show their performance in environmental activities or community activities.
It is often manipulated data that hides the true mission of the company.
Focus on the primary impact and check the metrics for companies you want to fund for their impact on the cause.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.