Valued Investing: Aligning Investment Dollars with Personal Values
Announcing Rough Draft Ventures’ investment in Valued Investing
Rough Draft Ventures is proud to support Zach Lupei of Valued Investing — a socially responsible investment platform that lets anyone align their investment dollars with their personal values. Acting as an online investment advisor, Valued Investing builds a portfolio of stocks that are tailored to each individual clients’ social values.
Why Values Matter
The idea for Valued Investing emerged after the unfortunate shooting at Sandy Hook. An investment firm owned Bushmaster Firearms which produced the rifle used in the attack. Media discussion swirled around whether the investment firm should divest the company from its portfolio. Zach was 26 at the time working at Oaktree Capital and knew he would personally feel awful to be profiting from the sale of firearms used in the attack. Zach diligently looked into his own 401(K) and found it very difficult to see what he personally owned, despite working portfolio analysis himself. He dug around SEC filings only to find one of his mutual funds owned a handgun manufacturing company. Zach attempted to divest from that stock. but there was no easy way to divest from a company he didn’t personally believe in. Financial advisors also did not have a scalable solution to customizing allocations, with personalization only existing for high net worth individuals. Today there is a new wave of student activists all pushing for endowments to divest from controversial issues like fossil fuels. Despite overwhelming support, students wish they could impact capital markets to make change.
The Product
Valued Investing is a platform for people to express their personal values through their portfolio. Socially conscious portfolios do exist today for a few, but the larger issue is individuals are forced to adopt someone else’s principles for a value-based investing approach. Instead, Value Investing allows individuals to emphasize issues that really matter to them and adapt to the values customers want. The goal is to give customers an index fund that looks like a normal index fund embedded with their own personal values.
Valued Investing is registered with the SEC as an online investment advisor. It does not offer 1:1 consulting advice, but can see an investment and adjust exclusionary or preferential filters real-time. We believe this is a great approach because it’s more affordable than traditional mutual funds or fee based advisors. At Oak Tree, Zach worked in compliance and portfolio analysis to better understand the hurdles with setting up a values based fund. Prior to this, Zach worked at SpaceX doing data analysis on large amounts of data helping to build an algorithm for backtesting returns.
The Story
Zach came into HBS with the idea for Valued Investing, but first wanted to explore how big the market was. Most people don’t realize that you can express your values through investment. Once people started thinking about where they earned returns, they latched onto the idea. Zach started building the platform last fall beginning with customer discovery to find out which issues get people most excited. From there, he built filters around those issues ranging from fossil fuels to pornography. Building an MVP of a financial services company requires huge amounts of trust. Valued Investing needed to exercise caution to make responsible decisions and deployed a lot of testing to ensure security and test the investment product returns. As Zach says, “Valued Investing has an opportunity to change the way we think about business motives and their societal impacts. I’m excited to work with the partners at Rough Draft Ventures and amplify our message.”
Zach — you continue to impress us with all your progress. We congratulate you on your success and can’t wait to see what comes next.
You can visit Valued Investing at their website, and learn more about Rough Draft Ventures here.
