Problem
Which pressing societal issue do you aim to address? Which SDG(s) is this issue linking to
Impact Methodology
Rubio’s Impact Report 2022
Quantifying impact is not only possible, it’s essential
We only invest in companies that address one of the biggest challenges of our time. Companies for whom every unit they sell, is a unit of impact. If you remove the impact, you remove the business.
Rubio Impact Methodology
We developed our social impact performance model together with the European Investment Fund in 2014. Rubio’s Fund I – which we opened in 2015 – was one of the first in Europe linking impact and carry, and we are proud to say that we overachieved on our impact targets (impact multiple > 1). We are still one of the few impact funds in the world linking our carried interest completely to both financial and impact returns, but are happy to see others starting to move this way. There is no golden standard in the market yet, so we want to keep learning, developing and sharing!
Impact methodology
Let’s start with the fundamental; the Theory of Change
What
Which effects do you want to achieve? Do these effects follow (directly) from your solution?
Who
Who benefits from your solution and how important is this for the people (or planet) experiencing it?
How much
How big are the effects in size and significance? What are the 1–3 measurable KPIs? Can they be linked to SDGs?
Additionality
What would have happened regardless of your solution?
Systemic impact
Does your company aim to change the system on a macro level?
But we won’t forget the building blocks of sustainable impact
Alignment
Do your company’s effects scale with financial growth, i.e. are impact and business model aligned?
Operations
Are you integrating The UN Global Principles in your everyday operations?
DNA
Is your organisation always looking to learn and to become better at achieving the impact mission?
As your impact partner in crime, we support you in every way
Together we set 1-3 impact performance indicators to monitor and track your impact, linked to your business forecast and applicable SDGs
Our Impact Advisory Board & independent investor council will provide expertise and external validation of the impact indicators
Impact anchored in the governance of both our fund & your company (Articles of Association)
We align incentives for impact & business; carried interest Rubio team linkedin to both finance and impact results
Together we go on a mission for radical positive change
We challenge you in yearly impact sessions to bring impact management within your organisation to the next level.
We systemically evaluate the impact & business progress at both fund and company level
External Impact Advisory Board
100% carry linked to impact targets
The financial remuneration of team Rubio is linked to both impact and finance targets. Our first hurdle is impact (100% of our carried interest – the amount of money we take after returns to investors – is linked to impact) If during the time of our investment the combined portfolio does not reach their impact targets, we don’t see our carried interest. This mechanism avoids conflicts of interest between impact and financial performance as our VC’s return is tied to both: no impact = no rewards.
The weighted overall Rubio Impact Target
is calculated each quarter to determine the fund’s actual impact performance compared to the three-year impact target set at investment date. The Weighted Overall Rubio Impact Target is calculated as follows:
1-3 Impact Key Performance Indicators (KPIs) are determined per investment.
Each KPI is assigned an impact weighting within the specific investment – as some KPIs are more relevant than others.
For each KPI a three-year impact target is set and validated (pre deal) by our Impact Advisory Board and finally (post deal) determined and approved by the Investor Counsel.
The Final Overall Rubio Impact Target per investment is calculated by setting off the actual impact reached against the three-year impact target multiplied by the assigned impact weight per impact KPI.
The fund level Weighted Overall Rubio Impact Target is calculated by multiplying the Final Overall Rubio Impact Target per investment by the relative investment weight of that investment.
We report the Weighted Overall Rubio Impact Target of our portfolio companies to our investors each quarter.
The fund overall impact hurdle at exit is minimum 60%, but we of course aim to exceed 100%.
The Weighted Overall Rubio Impact Target per 2022 year end is:
Fund 1: 162%
Fund 2: 11%
