Venture capital and growth

Friday 5th June 2020

There is a lot of discussion these days about whether economic growth is really a good thing. Endless GDP growth cannot be sustainable, we are limited by our planets’ resources ultimately and the biosphere that we inhabit. Kate Raworth developed many of these ideas in her amazing book ‘Doughnut Economics’; Humanity’s 21st century challenge is to meet the needs of all within the means of the planet.

Indeed, there is a strong ‘de-growth’ movement – that actually what is required to save the planet is a complete reworking of the global economy away from growth altogether, certainly amongst the most developed economies. I have a lot of sympathy with these views and I would support a number of more radical solutions to humanity’s current dilemma. 

However, we have to work with what is in our hands right now. Within the capitalist system there has to be the concept of ‘good growth’. ‘Bad’ companies can be replaced with ‘good’ companies, bad technologies from an environmental point of view replaced with great technologies that can cut emissions and reduce pollution. 

The other point about capitalism per se is that it is only as good as its regulation. Clearly the time of unregulated free market economics is well and truly over. The planet and the poor pick up the bill every time. However is there a place for strongly regulated capitalism that protects the environment and is able to redistribute wealth? I like to think so.

This is how I see the world of venture capitalism. We are planting the seeds of the future economy. We are specialising in the early stages of the economy where actual GDP impact may be generations away. But the point is we are financing the right companies of the future. Companies that will reduce emissions, tackle pollution, provide customers with sustainable solutions to their needs. This is not growth for growths sake, this is building for the future.

Matt Jellicoe