What is green investing?

Green investing is an increasingly popular philosophy that promotes investment toward environment-friendly companies or initiatives. Two investors might define a green company differently, but this mostly includes companies engaged in solving environmental problems (such as the development of renewable energy) or conducting business in an ecologically conscious way.

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This type of investing is deemed an offshoot of socially conscious investing, although neither of them implies investments that are safer than a market index such as the S&P 500. Investing in “green” firms can actually be riskier than other equity strategies, as many entities in this landscape are in the development phase, with low revenues and high earnings valuations. Still, if investors consider environmental protection via encouraging these eco-friendly businesses, then green investing can remain attractive and feasible.

Some options for building a green portfolio include the following:

Securities

Individual stocks allow investors to funnel their dollars to a number of companies that meet their “green” criteria.

Mutual funds and exchange-traded funds (EFTs)

This is investing in a pool of securities to offer average investors an affordable method for diversifying across multiple sectors.

Bonds

A fairly new part of green investing, green bonds produce funds for environmentally friendly ventures. This fixed-income vehicle, when offered by governments to fund green programs, may provide tax-exempt income.

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Gregory Lindae is a veteran in the investment industry with over 20 years in service and has worked with companies such as Blackrock, Salomon Brothers, and FMO. Learn more about green investing this blog.

Private Equity and Venture Capital: What’s the difference?

The common source of confusion between a private equity and venture capital is that they both refer to firms that invest in companies and exit by eventually selling their investments via equity financing. But all the funding similarity ends in this general, canopy aspect.

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These two business endeavors invest varying amounts of money, claim different percentages of equity, and deal with different sets of companies, distinguished by type and size. Venture capital firms mostly put their money in startups with high-growth potential.

Most venture capital firms spend $10 million or less in companies and would spread out their investments among various startups. This way, if one fails, the entire capital is not affected. Unlike private equities, venture capitalists deal only with equity, investing only in 50% or less of these.

Private equity firms, on the other hand, use both cash and debt in their investment, and mainly get involved in established, mature companies that are not earning. While private equities can buy companies from any sector or industry, they prefer to focus on a single company, buy 100% ownership, and work on the operations to make it grow anew and generate revenue.

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A go-to expert in the investment industry, Gregory Lindae has built an impressive track record and influence in venture capital and private equity markets. He has worked with prestigious companies like BlackRock, Salomon Brothers, and FMO. For more on his work, drop by this website.