There is a version of impact investing that has become almost entirely about the story.
You know the type. The deck is beautiful. The founder has given a TEDx talk. The mission statement uses words like “regenerative” and “systemic” and “transformative” or in more recent examples simply mentions “AI” in their deck. The impact metrics are creative, but optimistic in the way that happens when the person writing the numbers is also the person who needs them to look good. The valuation is based on a comparable from a San Francisco Series B in 2021. The revenue is either pre-launch or just launched or “accelerating significantly” depending on which slide you are reading.
There is no business here. There is a pitch for a business that might exist one day, dressed up in the language of purpose. This is not impact investing, it is storytelling with a cap table attached.
But here is the thing that does not get said enough: the opposite problem is just as real, and just as costly.
Across European private equity, family offices, and most institutional VC, there is a deep structural conservatism that has nothing to do with prudence and everything to do with fear. The conversation goes: show me three years of audited accounts, a clear path to EBITDA, comparable transactions in the sector, and a management team that has done this before. In an established industry, in normal times, that is reasonable diligence.
In food systems, agricultural transition, biotechnology, and industrial processing (the sectors where the most important economic and environmental problems actually live) it produces a systematic failure to deploy capital at the moment when it matters most.
A company that has three years of clean audited accounts, demonstrated unit economics, and a fully proven model is a good acquisition target or can simply go to the bank for money. It is not an investment opportunity in the traditional sense as the value creation has already happened.
The European institutional default is to wait until the risk is gone, then complain that the valuation is too high. Both ends of this spectrum are a waste. The greenwashed storytelling raises money it should not raise, deploys it badly, and poisons the well for the serious operators who follow. The overcautious institutional capital misses the window entirely, sits on the sidelines through the most interesting phase of a company’s development, and ends up either not investing at all or writing a much larger cheque later at a much worse entry point.
What we are actually trying to do
Hive is a private investment group focused on real-economy businesses and infrastructure. We invest across the full value chain of essential industries, such as food systems, land & agriculture, biotechnology, industrial processing. Businesses that make things, process things, move things, grow things.
Our strategy comes down to one principle: capital should go into assets and companies that generate both durable financial returns and measurable real-world outcomes. Not one or the other. Both, simultaneously, because of the same underlying business model.
The “durable financial returns” part rules out most of the storytelling end of the market. A business that cannot articulate its revenue architecture, its cost structure, and a credible path to positive unit economics is not a real-economy business. It is a nice concept, concepts do not generate durable returns. They generate exciting pitch meetings and then quietly disappear.
The “measurable real-world outcomes” part rules out most of what conventional PE and VC considers interesting. A business that optimises purely for financial return with no structural connection to the problem it claims to solve is just a business. Fine. There are plenty of those. We are specifically looking for companies where growth makes the outcome better, where selling more product means more land regenerated, more waste recovered, more people fed, more processing capacity unlocked for the next generation of food innovation. Impact that compounds alongside the revenue, not impact that gets reported separately in an annual CSR document that nobody reads.
The companies that sit at that intersection are rarer than either camp would admit. But they exist. And they tend to exist at a specific moment in their development.
The junction that matters
There is a point in a real-economy business’s life that is easy to miss if you are looking in the wrong direction.
It is past the concept stage. The product exists. It has been sold. There are customers who came back. The unit economics are visible even if they are not yet clean. The founder understands what is working and, more importantly, can tell you precisely why. The operational challenges are known quantities (supply chain, production capacity, distribution reach) rather than unknown unknowns or made up USPs. The team has survived something difficult and knows how to function under pressure (this is more important than most realize).
This is the tipping point. The company is not yet at the scale where the growth becomes self-funding, but it has enough evidence to know that the growth is real. Capital deployed here does not go into proving a concept. It goes into executing a plan that already has legs.
This is where we want to be. Not at the seed stage, where you are essentially betting on a person and a thesis with no operational evidence. Not at the growth equity stage, where the business is already de-risked and the valuation reflects that. At the point where the evidence is sufficient to underwrite the investment rationally, but the market has not yet fully priced in what is coming.
Getting this wrong in either direction is expensive. Move too early and you are funding a story. Move too late and you are funding someone else’s returns.
The discipline is in reading the evidence correctly. Revenue exists, but how does it behave? Is it growing because the founder is heroically closing every deal personally, or because the product pulls customers in and keeps them? Are the margins improving as volume grows, or compressing? Does the company have one large customer it cannot afford to lose, or early signs of a distribution base that is genuinely diversifying? Is the management team running on fumes and founder willpower, or do they have the operational depth to handle 3x the current complexity?
These questions do not require three years of audited accounts to answer. They require time spent with the business, with the customers, with the supply chain. They require the kind of judgment that comes from having seen enough companies at this stage to know what the real signals are.
On valuation specifically
The valuation inflation problem in impact and foodtech investing is real and it has done serious damage.
When a company raises at a multiple that is not anchored to anything, not revenue, not EBITDA, not even a credible projection of either, it creates a problem that does not go away. Every subsequent round has to justify the previous one. The story has to keep getting bigger to support a number that was never connected to the underlying business in the first place. Founders spend more time managing the narrative than managing the company. Investors who need to mark their portfolios spend more time defending valuations than helping portfolio companies grow.
And then the market turns, or the growth does not come, or a competitor raises at a saner multiple, and the whole structure becomes very uncomfortable very quickly.
We are not interested in playing that game. We do not need a valuation to be exciting. We need it to be honest. A business worth 6x revenue because it has demonstrated consistent growth, strong retention, improving margins, and a defensible position in a supply chain that is not going away is a more interesting investment than a business worth 20x revenue because the deck is compelling and the comparable is flattering.
The goal is not to find cheap companies. The goal is to find companies where the price paid reflects the actual risk being taken, and where the underlying business has the foundations to compound value over time without needing the story to keep inflating.
Solid foundations look like this: a product the market has validated with its own money, not just its attention. A cost structure the management team understands and can improve. A route to market that does not depend entirely on one relationship or one channel. A management team that is honest about what they do not know. And a business model where the impact is structural, where you cannot grow the company without growing the outcome, because they are the same operation.
When those things are present, the valuation question becomes much more straightforward. When they are absent, no amount of mission statement makes up for it.
What we prioritise
We look for businesses operating at critical points in the value chain. The upscaling infrastructure that food innovators cannot build themselves. The supply chain platform that turns agricultural waste into recoverable material. The consumer brand where impact is written into the unit economics. The land that sits at the foundation of everything and compounds quietly over decades while everyone else is chasing the next product launch.
These are not glamorous categories. They are essential ones. And essential, in our experience, is a better long-term investment than exciting.
Capital has a job. Its job is to find the places where it can do real work, to build things, fund growth, enable the operations that would not happen otherwise, and to do that work at a price that reflects the actual risk and the actual opportunity.
That is what Hive does.
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