Entrepreneurship | December 7, 2017

Rise of the Rest should take pride in impact — not run from it

The team at


In case you missed it, Steve Case’s new Rise of the Rest fund, which strives to “construct an ecosystem like the one in Silicon Valley that will provide support and connections to entrepreneurs in small towns,” is not an impact investment.

In a New York Times article published Monday…

…Mr. Case was quick to say the new enterprise should not be considered an impact fund.…Mr. Case said he would only succeed in changing the way investors think about the rest of the country if he can produce significant financial success stories…“We’re fans of impact investing,” [Case] said, “but we actually didn’t position this as an impact fund. First and foremost, our goal was to generate top returns.”

Rather than run from impact investing, however, Rise of the Rest ought to be embracing it. That Case didn’t in the Times report is worrisome, for a number of reasons:

  • It gives oxygen to the questionable myth that impact investments deliver sub-par financial performance. In truth, two-thirds of impact investors are seeking competitive returns;
  • It suggests the high-powered investors backing Rise of the Rest may have decided not to, if indeed it had been labeled “impact”; and
  • It perpetuates a narrow definition of impact investing, excluding the kind of systemic, ecosystem benefits the fund proposes to have.

Social benefits

There’s no question Rise of the Rest has an embedded impact thesis. As Alphabet chairman Eric Schmidt told the Times: “he hopes the effort creates more jobs, more wealth, better products, and helps society deal with a lot of jarring employment changes.”

Steve Case attracts a Who’s Who of business to his Rise of the Rest fund

So why not ensure that good quality jobs materialize? That wealth trickles down to employees and communities? That products are net-net “better” for society? And that training and opportunities for upward mobility really do change the trajectory in places “suffering from the erosion of manufacturing”? These are all real impacts, and they are all measurable.

Making the extra effort to generate and report measurable impact does not narrow the opportunity set or dim the financial prospects of an investment. In many cases it is simply a more disciplined, accountable, and truly empowering way of investing, period. Otherwise, how will Case and his co-investors know The Rest are actually Rising?

It’s a real shame Rise of the Rest has disavowed impact. It’s a missed opportunity to educate a tremendously influential group of business leaders.