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Investing in Social Impact

The key to being a good venture capitalist is to find a great company when it is little more than a great idea.

Nancy Pfund '82, founder and managing partner of DBL Investors, led her firm to key early investments in Tesla, Pandora, and Solar City. But for "double bottom line investors" such as DBL, finding a potential growth company isn't enough to spur adding a company to their portfolio. For Pfund, a company's mission is often as important as its business plan.

Pfund discussed her vision at a panel on the social impact of entrepreneurism on November 14 that was part of the Association of Yale Alumni's 74th Assembly. She was joined by Bo Hopkins '86, managing partner of CM Equity Partners and a lecturer at Yale University's Jackson Institute for Global Affairs, and Ruchit Nagar YC '15, a co-founder of a student venture to track and improve the health of babies in rural India. The trio discussed the ways that a company's social impact could be measured as well as the influence early investors can have in guiding a venture toward achievable social aims.

Pfund said that her firm focuses on finding companies that view their social mission as integral to their overall goals. One of DBL's successful investments is Revolution Foods, which provides healthy and tasty school lunches to K-12 schools—a market that had proven difficult for larger companies to make money in. The company contributes to its community by providing jobs in poor neighborhoods and helping employees with financial literacy and English skills. "They checked a lot of boxes on the mission side," she said. "And on the financial side, we saw that if they could crack the K-12 code, they’d have a great business."

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