By Wes Lyons, General Partner, Eagle Venture Fund
Every few years, someone declares that impact investing is dead, or worse, that it never existed at all.
Kevin Starr’s recent essay, “There Is No Such Thing as Impact Investing,” in the Stanford Social Innovation Review, lands squarely in that camp. His critique is sharp, well-earned, and rooted in hard experience: too much of what passes for impact investing today is little more than market-rate capital paired with good intentions and weak accountability. Intentionality without sacrifice. Storytelling without additionality.
On that point, he’s right.
Where I part ways with Starr is his conclusion that we should abandon the category altogether and retreat to a binary choice between philanthropy and commercial investing. That framing misses something essential: there are businesses where profit and impact are not in tension, and capital that accelerates those businesses is neither charity nor self-deception.
The problem isn’t that impact investing doesn’t exist. The problem is that we’ve been far too loose about what qualifies.
At Eagle Venture Fund, we don’t believe impact sits “between” philanthropy and commercial investing. We believe the only durable form of impact investing is when impact is native to the business model itself: when a company gets paid because it produces the outcome we want to see in the world, not despite it.
This distinction matters.
For example, we see this in companies whose customers pay them specifically to make human trafficking harder to execute. Banks, hotels, or online platforms use technology to detect human trafficking-related activity. These businesses don’t generate revenue through virtue signaling or downstream reporting. They generate revenue when risk is identified earlier, criminal behavior is exposed, and liability is reduced. If those tools fail to surface real threats, customers churn, and the business fails.
In these cases, revenue is not a reward for intention. It is a consequence of effectiveness.
Most social good requires subsidy. That’s not a failure; it’s simply reality. Philanthropy plays a critical role in de-risking innovation, funding early experimentation, and supporting solutions where markets will never fully function. Starr is right to defend that role, and right to call out investors who want to feel virtuous without giving anything up.
But there is a different category of company—rarer, harder to find, and more demanding of discipline—where the revenue engine and the impact engine are the same thing.
In our case, those companies are technologies that dismantle systems of exploitation: tools that detect trafficking networks, protect children online, expose illicit financial flows, create lawful employment pathways for survivors, or enforce accountability at scale. These businesses don’t “serve the poor” in a way that invites mission drift up-market. Their addressable market is the problem.
Consider technologies designed to protect children online. Their market does not expand by tolerating more harm; it expands only by preventing harm. There is no higher-margin version of the product that abandons the mission, because the mission defines the product. Commercial success and moral success rise, or fall, together.
When they succeed commercially, exploitation becomes harder, riskier, and more expensive. When they fail commercially, the impact fails with them.
That is not a double bottom line. It is a single bottom line with moral consequences.
This is where much of the impact investing conversation has gone wrong. Too many investors and companies have taken non-unique business models that don’t inherently solve the social issue they are targeting, and have tried to bold-on social impact to old models. These funds sometimes have to paper over tradeoffs instead of interrogating business models. Too many deals have relied on narrative alignment rather than structural alignment. And too many investors have assumed that saying the word impact absolves them from asking the hardest question of all:
What, exactly, must go right for this company to make money, and does that outcome advance human flourishing or undermine it?
If the answer requires permanent concessionary capital, then let’s be honest and call it philanthropy. If the answer depends on future regulation, consumer virtue, or reputational pressure alone, we should be cautious. But if the answer is that the company’s core product directly disrupts a harmful system. and customers willingly pay for that disruption, then commercial capital isn’t corrupting the mission. It’s scaling it.
That kind of alignment is rare. It demands patience, rigorous diligence, and a willingness to walk away from compelling stories that don’t hold up under scrutiny. It also demands humility from investors: we don’t get to declare impact into existence. The market will eventually render a verdict.
In that sense, Starr is right about something deeper: Most impact investing has failed because most businesses aren’t built to carry both profit and the added social impact purpose that we bolted on after the business model was conceived. But the response shouldn’t be to abandon the field. It should be to raise the bar.
Impact investing doesn’t need better intentions. It needs clearer definitions, harder filters, and greater moral courage.
When capital is aligned with truth…about incentives, about markets, and about human dignity…it can do more than fund good intentions. It can change systems.
That’s not a fantasy. But it is a discipline.
Wes Lyons is a General Partner at Eagle Venture Fund, where he leads investments in technology companies tackling some of the world’s most entrenched problems. A husband, father, Naval Academy graduate, former combat aviator, and CFP®, Wes focuses on structuring capital for both financial performance and enduring generational impact.
