Many are the investments taking place in society together. Every investor in the world is doing so with the essence of making an impact on society. Then does it mean that some investments do not actually bring impact to the society? Well, to answer this question, we are only basing on responding to the fact that venture capital is the original impact investing, even from the way it is set up. Why is it the original impact investing? Some of the reasons are listed below?
To start with, it helps in boosting productivity where it thrives on putting to use underutilized resources that are readily available. They create opportunities where technologies can be used to bring change. They also help in meeting the needs of society in a very effective manner yet affordable. This is because they produce products which are better yet they are very cheap to improve the lives of people. This is by employing new technologies making provision of goods and services easy.
Venture capital helps to prevent abuse of market power. Where venture capitalists are not involved, the market is lazy, dormant lazy and very uncompetitive leading to providing services that are not on point. Startup companies are therefore necessary on the market as they help in keeping in check the market forces. Venture capital; also has helped to increase market resilience. When the market is highly diversified, it reduces risks and can help develop shock absorbers for cases that would lead to the collapse of the whole system.
Lastly, venture capital has really helped in empowering individuals. This is because startups have brought employment opportunities to the people who are involved. This has made their living standards better.
Reference