18 May 2021

Investor Guide: How to assess your portfolio’s risks of ‘unintended consequences’

By Yumi Tsoy

Earlier this year we became (to our knowledge) the first VC globally to map and share the risks of our portfolio’s ‘unintended consequences’. For those not familiar with the concept, unintended consequences are outcomes of an action that are not intended or foreseen. They can be positive or negative, but it’s most likely the latter that pose risks to a company and its investors, filling the news with headline grabbing stories. From the misuse of personal data to increased screen time to social media-triggered anxiety – these are all examples of unintended consequences of many tech startups (naming no names).

Despite pursuing positive outcomes, tech for good is no less immune. As investors who centre our investment thesis on delivering positive social or environmental impact, we have both a moral and financial incentive to ensure that our ventures deliver impact as intended.

At BGV, we started thinking about assessing our portfolio’s unintended consequences as early as 2019 when we first asked our portfolio to tell us about what negative effects might arise from their product or service. This year we built on those efforts by grouping those consequences and mitigation strategies into distinct categories and sharing them for the first time in April 2021 in our latest Impact Report.

With an interested response from many in the wider tech for good, VC and impact investing ecosystems, we thought we would share how we assess our portfolio’s risks of unintended consequences with a guide on how other investors can too. Including what ‘unintended consequences’ are, why it’s important to be assessing them and how to do it.

Read the full guide here – How to assess your portfolio’s risks of ‘unintended consequences’