How do we make sure we’re allocating each and every critical dollar we receive in the best possible way? How do we do create a portfolio that generates both impact and revenue?
For most of our history, we at Root Capital — along with others in the impact investing space — have relied on a combination of intuition and prior experience to answer these questions. As an organization, and as a sector, we’ve lacked the the right tools to account for all of the factors of portfolio performance in a quantitative and holistic way. Until now.
In the latest issue of the Stanford Social Innovation Review, Root Capital’s Senior Director of Strategy and Impact Mike McCreless introduces the “efficient impact frontier,” a powerful approach to building a portfolio with the greatest possible impact for the level of expected return.