Since 2001, impact VC firms have raised $13 billion to invest in companies that provide a social or environmental benefit as part of running their for-large-profit business. Indeed, $10 billion of that has been raised since 2010 alone. Impact VCs are VCs first that intend to generate market-beating financial returns because of, not in spite of, an impact-oriented investment thesis.

To date, these impact VC funds have yet to be categorized as a venture trend. Too often they are mistakenly lumped in the general impact investing category, a very broad space of investors — from foundations to private equity to wealth management — that seek social or environmental impact, but for near-market, sub-market or even net-zero financial returns. Impact VCs focus on early-stage and mid-stage private businesses and most have institutional LPs that are expecting 3x or higher returns on their investments.

Similarly, the for-large-profit businesses in which they invest, which have been identified as a trend, do not have a consistent moniker that encompasses the whole sector. In the last 30 years, these companies have been called double-bottom line, triple-bottom line, ESG, social enterprise, benefit corporations, B Corps, profit-from-purpose and more, which are all relevant, but don’t cover the whole category. Of those, profit-from-purpose makes the most sense from an investment standpoint, as it makes clear there is a higher purpose to the company, but profit always comes first.