TRIVE’s Positive Impact Investing
TRIVE is an seed stage VC based in Singapore. We invest in technology companies operating in Southeast Asia creating positive impact.
Impact Methodology and Framework
We all understand the need for Sustainable Investing. Doing so typically follows one or a combination of 3 methodologies:
Socially Responsible Investing (SRI)
ESG Investing
Impact Investing
How they differ is which part of the process emphasis is placed on as well as the chosen framework for the measurement of adherence or success. At the same time, all 3 methods have an expectation of financial returns.
Socially Responsible Investing uses a set of values to negatively or positively screen investment opportunities within the landscape, usually by sector. These values could be based on personal morals, religion or political beliefs. By negatively screening for certain sectors such as those related to alcohol, tobacco, firearms, or even gambling, it allows the portfolio to be aligned to the values of the investor(s).
ESG refers to the environmental, social, and governance practices of an investment. This usually involves evaluating the operations of the underlying investment and ensuring that they stay within certain parameters. This may also extend to the upstream and downstream supply chain that the investment sits within.
Impact Investing places emphasis on positive outcomes from the products and/or services of the investment, being beneficial to a specific goal whether it’s environmental or to society. The impact metrics tend to be the same measured as the business goals as the bigger the company’s unit sales, the greater the positive outcomes created.
At TRIVE, we believe that impact investing as a methodology gives both us and our portfolio companies the best alignment in terms of goals and metrics to strive for without any trade off between financial growth and impact.
Naturally, we also include SRI principles screening against societally negative sectors including gambling, tobacco and alcohol production, amongst others. Our internal impact evaluation framework results in 3 passing grades: a) Does No Harm, b) Benefits People, and c) Contributes to Solutions.
Investment Focus
Having said that, we are first and foremost a for-profit venture capital firm working to generate outsized returns for our investors (LPs).
What we have done is chosen to be intentional with our work and the capital provided by our investors and backers.
Our investment impact areas is in line with UNSDG goals 3, 8, 9, 12 and the technology solutions we focus on are those that enable data driven decision making.
Some examples of how better decision making leads to sustainable impactful outcomes:
Enabling manufacturers
Material expertise coupled with Machine Learning enables manufacturers to potentially improve quality products, use less input, hasten up R&D and shorten time to market, and even customise offerings to specific needs. .
Enabling professional services
For sectors that are pattern or case study based including medicine and law, data based AI technologies enable faster, more accurate, personalised recommendations by professionals, thus enabling earlier detection of incidences, protection and treatment.
Enabling labour
Rule based autonomous systems that can take in and process real time data shift human labour from manual repetition to higher value activities such as problem solving and customer engagement.
Evaluation Methodology
We first evaluate based on the cogency of the business pitch and then against our impact framework.
Business Evaluation — First Cut
Investing at the seed stage, we look for 2 things from the founder: 1) depth of understanding of the market gap and 2) tenacity.
Not every founder is articulate and eloquent but by taking the time to talk to the team, we can assess their depth of understanding to get to a few key ideas:
Product Market Fit — Persona, Problem, Existing Alternatives (Competitors), Solution
Market Size — Bottom up based off persona
Go To Market Strategy (GTM)
Business Model
Traction — Serves to validate GTM and Business Model
Tenacity is not something easy to evaluate. We’ve had founders give up just 2 months after us investing and we also have founders who have kept going for more than 5 years to finally see growth.
Some hints can be gleaned from the team’s underlying driving force and spending time with the team months before they are ready to raise and observing how they choose to overcome obstacles and challenges.
As we get closer to the raise, we also evaluate a host of other factors that are traditionally included by VCs.
Impact Evaluation
Our impact evaluation framework is adapted from the Impact Management Project Framework. It outlines the What, Who, How Much of the impact created by the startup, how much the investment contributes to the scale of the impact and risks associated with failure to deliver said impact.
Passing outcomes are scored from a) Does No Harm, b) Benefits People, and c) Contributes to Solutions.
What’s next
We will be making efforts to reach out to and learn from founders, investors and experts in the impact tech investing space and will be sharing the knowledge openly.