Do VCs have a higher sense of Purpose - beyond Profit? - with Mika Salmi, Lakestar Ventures

Summary

The video script discusses the evolving role of venture capitalists (VCs) in Europe, emphasizing a growing focus on ethical and sustainable AI, as well as ESG (Environmental, Social, and Governance) criteria. With new EU regulations requiring investors to track ESG factors, VCs are not only reporting on these metrics but also actively supporting their portfolio companies in achieving ESG goals. There's a noticeable shift in the industry's mindset, with a balance sought between financial returns and positive societal impact. The conversation also touches on the challenges and opportunities in the crypto space, pondering whether profitability and social good can coexist in this new era of investment.

Takeaways

• 💰 The primary goals of VCs are making money and strengthening Europe.
• 🌐 There is a growing sense of higher purpose among European VCs, including Lickstar, compared to the past.
• 🤖 The focus on ethical AI and sustainable AI is becoming more prevalent in the startup space.
• 📋 ESG (Environmental, Social, Governance) factors are now being tracked by investors due to EU regulations.
• 🔍 Investors are required to conduct deep surveys and report on ESG aspects of their portfolio companies.
• 🛠️ The initial phase of ESG compliance was reporting, but the next phase involves being proactive in helping companies achieve ESG goals.
• 🌱 There is a shift in mindset among partners in VC firms towards considering ESG more seriously.
• 💡 The presence of dedicated climate funds indicates a segment of the investment community focused on environmental impact.
• 🔑 While some investors are solely focused on returns, others are looking to make a positive impact on the world.
• 🤔 The question arises whether it's possible to balance profit-making with having a positive impact, a concern that was also present during the clean tech revolution in the late 2000s.
• 🚀 There is a sense that the current focus on ESG and positive impact is different and potentially more successful than past attempts.

Q & A

What is the current focus of European venture capitalists (VCs) besides making money and strengthening Europe?

European VCs, including Lickstar, are increasingly focusing on ethical AI, sustainable AI, and ESG (Environmental, Social, and Governance) factors in their investments.

How has the European Union (EU) influenced the approach of VCs towards ESG?

The EU has introduced regulations that require investors to track ESG factors, leading to a more proactive approach in integrating these aspects into their portfolio companies' operations.

What is the initial phase of the EU's ESG regulation implementation for VCs?

The initial phase involves reporting on ESG factors for all portfolio companies, ensuring transparency and accountability.

What is the next phase of ESG integration for VCs after reporting?

The next phase requires VCs to be proactive in helping their portfolio companies achieve specific ESG goals, moving beyond mere reporting.

How has the attitude of VC partners towards ESG changed over time?

The attitude has shifted significantly, with partners now considering ESG as an integral part of their investment strategy, rather than an afterthought.

Are there dedicated funds focusing on specific ESG-related areas such as climate change?

Yes, there are dedicated climate funds and other ESG-focused funds that aim to make a positive impact while also seeking financial returns.

What is the current sentiment regarding the balance between making a financial return and contributing positively to the world?

There is a growing belief that it is possible to achieve both financial returns and positive societal impact, unlike the clean tech revolution of the late 2000s.

How does the speaker view the difference between the current ESG-focused investments and the clean tech revolution of the late 2000s?

The speaker believes that the current wave of ESG investments feels different and more promising than the clean tech revolution, which did not yield significant financial returns.

What role does the speaker see for crypto investments in the context of ESG?

The speaker suggests that while there are crypto investments being made, the focus is on ensuring that they also have a positive impact, aligning with ESG principles.

What is the overarching question the speaker is contemplating regarding ESG and financial returns?

The speaker is exploring whether it is possible to weave ESG considerations into all investment activities, including crypto, to ensure they contribute positively to the world while still being profitable.