Unless you assign relatively high priority to the cause that is addressed by the company, I think it’s appropriate to suppose that other impact investors are over-valuing the social impact. Also, since other impact investors don’t think about counterfactuals, they are likely to greatly overestimate the social impact. They may think that when they invest $1000 in a different company, they are actually making that company $1000 richer on balance… when in reality it is only $100 or $10 or $1 richer in the long run, due to market efficiency. I don’t think markets are generally inefficient, just a bit, sometimes, it really depends on how you define it.
Unless you assign relatively high priority to the cause that is addressed by the company, I think it’s appropriate to suppose that other impact investors are over-valuing the social impact. Also, since other impact investors don’t think about counterfactuals, they are likely to greatly overestimate the social impact. They may think that when they invest $1000 in a different company, they are actually making that company $1000 richer on balance… when in reality it is only $100 or $10 or $1 richer in the long run, due to market efficiency. I don’t think markets are generally inefficient, just a bit, sometimes, it really depends on how you define it.