Our bet is that in the future, the only companies that will matter will be ones that combine profit and purpose.
Today, more money is going towards investments that “generate positive, measurable social and environmental impact alongside a financial return.” The market size is estimated to be approximately $502 billion (some even say a few trillion … a big gap, we know 🤷), and it’s growing.
This category is traditionally called “impact investing” (others may describe it as mission-driven investing or one-pocket investing). However, we’re finding it to be unproductive to classify this form of investing as something different. Why? Because, the term “impact investing” now comes with a lot of baggage — it carries the scars of weak returns and unproductive projects.
All investments, including “impact investments” should be anchored to market returns. This goal is unfortunately often forgotten by some investors who place bets in less-than-ideal business models and then give excuses for these smaller returns.
So let’s move away from using the term “impact investing,” and rather, believe that the best investments are those that marry profit and purpose. This is the old standard, with a renewed focus.
Now, why do we believe in marrying profit and purpose? It is the best framework to build a company that can exist into infinity (and beyond?).
When the average lifespan of a company on the S&P 500 is under 20 years, this may seem like an impossibility. How do you build something that outlasts economic cycles, competition, and generations?
We don’t know yet, but we believe it could only be a company that reaches market dominance and wins the universal support of society.
This company plays the long-game, becomes entrenched, and works to produce benefits for as much of the world as possible. It becomes structurally necessary and no one wants to see it go.
We’re calling this idealized organization the Forever Company.
We don’t know if something like this is possible, but it paints the dream and gives us a more tangible form to strive towards. Understanding how profit and purpose intertwine in this way will be something Apart will try to better understand in the future.