As an impact investment manager, impact is central to our operating ethos, both in how we manage our firm and our funds. But how can we ensure that our investments are actually creating the desired impact?
One tool that we’ve found helpful to stay true to our vision is a theory of change. There are many definitions, but for us, it’s a framework outlining the steps and assumptions involved in achieving our specific impact investment goals.
Documenting our theory of change has allowed us to codify what we’ve been thinking and doing for the past three years. It has also highlighted how we’ve put intention into practice, and how each team member contributes to impact. It’s clarified who we are, what we stand for, and the lasting impact we want to catalyze as we raise our second fund.
In April 2022, I made a public commitment to stand up and be counted. To be vocal and unequivocal about our approach to ESG and impact. To practice impact investing and ESG leadership by sharing and publishing our impact practices and metrics and hope this inspires other firms, in and out of VC, to do the same.
We expect that our Theory of Change will evolve, informed by our thesis development, insights, best practices, and growth as impact investors. But that’s not a compelling argument for why we shouldn’t share it now. Impact is fundamental to Tenacious, it’s who we are and what we do, so we are sharing our theory of change and hope this inspires other investors to do the same.
For those of you who might be unfamiliar with the theory of change framework, we’ve provided a brief overview below. Otherwise, feel free to skip this section and dive straight into our theory of change.
At its core, a Theory of Change framework hypothesizes how change will be created. It is a conceptual model that describes the specific actions and interventions that will be undertaken to achieve the desired impact. The investment theory of change typically includes the following components:
We believe that in agriculture and food systems, alpha is in impact, and that by doing good, we can do well. In line with impact investing principles, we prioritize – on equal terms — environmental impact and returns.
At Tenacious Ventures, we screen for opportunities that actively do good and deliver impact. We invest at the intersection of food and agriculture system transformation and climate solutions, and summarize our theory of change as follows:
At the next level down, our theory of change expands on each of the above as follows:
We invite you to delve into our full theory of change document below and encourage you to share it with others.
Lastly, we’d love to hear from you. Please feel free to reach out with any questions, comments, or feedback you may have. A theory of change is just that: a theory, and we are eager to refine ours.
While I personally made a commitment to show leadership by sharing and publishing our impact practices and metrics, documenting the Tenacious Ventures theory of change was a firm-wide collaborative effort. I'd like to thank my teammates Komal, Sarah, and Matthew for their contributions.