What is impact venture capital? Find out from our Advisory Board member, Pasi Vänttinen.
A while ago I got a good lecture on venture capital from Pasi “Vänä” Vänttinen. Vänä is a natural part of our Advisory Board. First, he has strong and long experience from entrepreneurship. And secondly, he has wanted to see and supported us to get together bigger international event in Turku for quite some time. He is very happy to see it finally materializing.
Last year, Vänä founded Vana Capital & Venture. The company focuses on impact venture capital, which is one special segment of the venture capital market focusing in sustainability with returns on the investments. In impact venture capital, you choose companies that have sustainability and responsibility at the core of the business. With sustainability, you want to ensure that the business can make positive impact for the environment, economy, society and people in addition of being profitable in the long-term. For Vana Capital & Venture, this has meant investing and being involved in companies, for example, that uses high quality natural and ecological wild silk for making unique luxurious textile products or integrating renewable energy solutions to new modular building technology system for more sustainable urban development in the future.
With impact venture capital and in social venture capital investing focus is on large society problems solving companies, that are creating something good – but the companies are also expected to provide returns on the investments. In traditional and mainstream venture capital investing looks and concerned with large as possible returns and faster you get them the better. Investors are looking for faster cycle development and growth companies. In impact venture capital, investing means usually more longer term firm development and growth cycle along with the returns on investments. But impact venture capital is not charity work, you just need to be more patient with companies development and returns. (I did not know, but there are own segment in venture capital that does charity. In philanthropy venture capital investments are done into non-profit companies or organisations with no expectation of returns, but expected to build the companies to get eventually self-sustaining and sustainable to solving some major societal and/or environmental problem. But that is a whole another story.)
Vänä has been involved in many technology companies as a founder and as an entrepreneur. He sees that one of the strengths of Vana Capital & Venture team is their long experience and versatile understanding from hands-on entrepreneurship in different industries and companies. They have all been involved substantively in company running and financing them with their own money. That is where they differ from many investors with having own personal and previous experience in many different entrepreneurial ventures compared to many others in venture capital with working experience in a bank, in asset management or as a consultant previously. What Vana team brings to their invested companies, is not just the money, it is the knowledge and hands-on experience of how to develop and grow companies or business.