The Myth of Fast Returns: Why Patience is a Competitive Advantage in Investing
Investors love success stories: startups that become unicorns in record time, or projects that promise high returns after just a few years. This narrative has shaped how capital is distributed for decades. But while the focus on speed has grown ever larger, we’ve overlooked something crucial: some of the most groundbreaking innovations and sustainable business ideas need one thing above all — time.
The myth of quick profits, however, has a strong pull. It suggests that success is primarily measured by the speed of results. But this view is shortsighted. It leads to truly profound innovations that have long-term impacts on society and the economy not receiving the support they need. Instead, capital flows into short-term projects that deliver superficial successes but rarely effect real transformation.
This article addresses this issue. Patience is not only an often underestimated strength but also a strategic advantage. We look at how models from impact investing — from patient capital to blended finance to alternative approaches — can achieve not only financial but also social and ecological returns in the long term. Because those who are willing to overcome short-termism are rewarded not just as investors, but as shapers of change.
Short-termism as a Growth Trap Or Why Speed Can Be Expensive
The pursuit of quick results has become deeply embedded in the DNA of today’s investment behavior. But what appears to suggest efficient action increasingly shows its dark sides: startups sacrifice their long-term strategy in favor of short-term results, while investors squander the opportunity to benefit from groundbreaking innovations and sustainable growth.
Startups are particularly vulnerable to the negative effects of short-term thinking. Under pressure to generate initial revenue as quickly as possible or secure the next funding round, many companies focus on quick results. However, these short-term goals often conflict with the timelines required for profound innovations. In the cleantech industry, for example, promising technologies like high-performance energy storage or emission-free building materials haven’t been given the time to reach market maturity. Instead, projects were discontinued or reduced to a minimum because investors demanded quick returns. The result? Companies stagnate and miss opportunities to fully exploit their innovative potential — while society waits for progress.
Investors also pay a high price for chasing quick exits. The focus on short-term returns leads to stakes being sold too early — often before they can reach their full potential. An analysis by Cambridge Associates* shows that funds with longer holding periods not only achieve higher returns but also support companies that achieve long-term market leadership. However, when the strategy is based on quick turnarounds, not only does startup growth suffer; investors also miss out on long-term value creation opportunities.
Another problem is the systematic loss of trust. Founders who accept short-term expectations tend to minimize risks and pursue less ambitious projects. This leads not only to an innovation bottleneck but also to less differentiation in the market. Investors lose access to the real “moonshots” — projects that could transform entire industries.
The impacts, however, extend far beyond companies and investors. Socially relevant innovations — such as in energy transition, circular economy, or global healthcare — require time and patience. But when investors push for projects to deliver quick results before the technology is mature, transformative solutions often remain stuck in an early stage.
An example of this is the energy sector: the transition to renewable energy or the development of CO₂-neutral technologies requires investments that will only generate returns in decades. However, when the focus is on short-term profits, these projects often lose their funding. The effect? The global transformation that is urgently needed progresses only slowly.
Short-term mindsets might appear rational at first glance — especially in an environment characterized by competitive pressure and rising return expectations. But they block the long-term development that could advance both companies and society. The solution? A radical rethinking of investment culture: patience as a strategic strength and as the key to sustainable innovation and market leadership.
Patience as Leverage
Patient Capital deliberately sets a counterpoint in our world. It is an investment strategy that aims for long-term partnerships, sustainable growth, and profound impact. Unlike traditional models that often seek to realize high profits within a few years, Patient Capital provides the space and time that transformative innovations need to reach their full potential.
Patient Capital thus fundamentally differs in its philosophy and approach from traditional investments. The goal isn’t to maximize profits as quickly as possible, but to accompany companies on their path to market leadership and social impact. Investors who act according to this principle have longer staying power — and often a greater vision. They are willing to commit capital for a period of ten years or longer to enable innovations that can bring about profound changes in industries and society.
Patient Capital has proven particularly effective in sectors that require complex technologies and long development cycles. In the deep tech industry, for example, it enables the development of new materials, quantum computing, or autonomous systems that need significant lead times to become market-ready. Climate tech initiatives also benefit from Patient Capital, as the transition to renewable energy or the creation of CO₂-neutral technologies often takes decades of research, development, and implementation. This approach also has a transformative impact in healthcare: from developing new therapies and biotechnologies to scaling global health solutions, investors are needed who are willing to invest time and resources in long-term success.
Thus, Patient Capital offers advantages not only for companies and society but also for investors themselves. By foregoing quick exits, they can secure long-term market leadership and sustainable financial returns. Companies supported by long-term-oriented investments have the opportunity to establish themselves in their market and build competitive advantages that other, short-term funded companies cannot achieve.
Furthermore, investors benefit from the positive social impact of their commitments. By promoting innovative and regenerative business models, they actively contribute to addressing global challenges such as climate change, resource scarcity, or healthcare provision. This double return — financial and social — makes Patient Capital not only a strategic strength but also a crucial factor for the future of investments.
Patient Capital is more than just an alternative to the status quo — it’s a vision for how investments can sustainably change the world. Patience might seem like a luxury that not everyone can afford at first glance. But in a time when humanity’s greatest challenges require long-term solutions, patience becomes an indispensable lever for driving innovation and transformation.
More than Patience: Innovative Approaches for Sustainable Investments
While Patient Capital may play a central role in impact investing, it is far from the only way to drive social and ecological transformation. The world of sustainable investing is rich with models that specifically address different needs, risks, and objectives. These alternative approaches open up new ways for investors to deploy capital effectively while achieving both financial returns and positive impact.
- Blended Finance: Minimizing Risks Together
Blended Finance combines public and private funds to enable investments in projects that would be too risky for the private sector alone. Public funds — often in the form of grants or favorable loans — serve as a safety net to mobilize private capital. Success stories are particularly prevalent in renewable energy, where development bank funding has attracted private investors to realize solar and wind power projects in emerging markets. The joint approach not only shares risks but also enhances scaling opportunities. - Impact Funds: Structured Approaches with Clear Goals
Impact Funds offer investors a platform to specifically invest capital in companies and projects with clear ESG goals (Environmental, Social, Governance). These funds are characterized by a clear dual mission: they not only seek financial returns but also value measurable social or environmental outcomes. Prime examples are funds focusing on renewable energy or social innovations, offering investors a tangible way to be part of solving global challenges. - Mission-Aligned Equity Financing: Uniting Values and Growth
Mission-Aligned Equity Financing goes beyond mere capital provision. Here, investor engagement is directly aligned with the company’s values and goals. Such partnerships not only create financial stability but also strengthen strategic alignment with long-term goals like social innovation or climate neutrality. This model is particularly sought after by companies in critical growth stages who don’t want to compromise their mission. - Social Impact Bonds and Green Bonds: Investing in Outcomes
Social Impact Bonds (SIBs) are an innovative way to finance social projects. Private investors provide capital to launch social initiatives like education programs or poverty reduction. However, repayment — often with returns — only occurs if predefined outcomes are achieved. Similarly, Green Bonds and Sustainability-linked Bonds offer a way to mobilize capital for environmental and climate projects. The difference: while Green Bonds are explicitly used to finance sustainable projects, Sustainability-linked Bonds are tied to achieving specific sustainability goals, incentivizing companies to improve their ESG strategies. - Catalytic Capital: The Lever for Untapped Opportunities
Catalytic Capital refers to investments that deliberately take higher risks or accept lower returns to attract other investors to risky but transformative projects. It’s a strategic lever often used in early development phases to unlock new markets or technologies. Examples include investments in early-stage projects in circular economy or novel healthcare solutions in developing countries. - Shared Ownership Models: Participation Instead of Control
Another innovative model is Shared Ownership. Here, investors and stakeholders — such as communities or employees — share ownership rights in a company or project. This model promotes not only financial stability but also social acceptance and local community engagement. An example is energy cooperatives that involve both private and public investors to work together on energy transition.
The diversity of these approaches shows that sustainable investing is much more than patience and long-term thinking. It’s about finding the right tool for each challenge — whether through partnerships, innovative financing models, or shared ownership. For investors willing to think outside the box and venture new paths, this range offers a unique opportunity to not only generate returns but also effect real transformation.
A Framework for Strategic Investment Decisions
Patience in investing isn’t just a virtue. It makes the crucial difference between success and missed opportunities. But how do investors recognize when patience is appropriate? A systematic decision framework can help set the right course for long-term impact and returns.
Patience shouldn’t be applied blindly, but targeted where it can make the biggest difference. Three key questions help with the decision:
1. How high is the scaling potential?
Is the business model or technology designed to achieve a market-leading position? Patience is particularly meaningful when there’s a prospect of dominant market influence — such as with breakthrough technologies in renewable energy or healthcare.
2. How long until the technology or model is market-ready?
Some innovations, like quantum computing or new biotechnology processes, need years to reach their full market potential. In such cases, short-term thinking often leads to underfunding and missed opportunities.
3. What social impacts can be achieved long-term?
Investments that have the potential to create sustainable changes in key areas like climate protection, circular economy, or social justice often require patience to enable real transformations.
The power of patience is evident in prominent success stories. One example is the Danish company Ørsted. Once a conventional energy provider, Ørsted invested in offshore wind power over years while returns were pending. Today, the company is a global pioneer in wind energy and a prime example of how patience can be rewarded both environmentally and financially.
However, there are also reverse examples showing how short-termism can fail. Companies aiming for quick exits often miss strategic opportunities. The case of video streaming service Quibi, which launched quickly with billion-dollar financing and failed just as quickly, is a cautionary lesson for investors.
Patience doesn’t mean investors must focus exclusively on long periods. Rather, the strength lies in intelligently combining different approaches. Patient Capital can be linked with Impact Funds or Blended Finance to minimize risks while pursuing long-term goals.
An example is the transition to green infrastructure. Here, Blended Finance models can be used to reduce initial risks, while Impact Funds and Patient Capital enable scaling. Such combined approaches promote not only economic stability but also social progress.
Patience isn’t an end in itself but a strategic tool that investors can use to effect real change. It allows looking beyond short-term hurdles and exploiting long-term potential. But like all investment decisions, it requires thorough analysis — and the willingness to break new ground.
Patience in a Pressure Cooker — How Investors Can Succeed in an Impatient Market
Patience may be strategically sensible, but it’s difficult to implement in the reality of a market heavily focused on short-term gains. Investors who think long-term face significant challenges — from the expectations of their Limited Partners (LPs) to temporal competition from short-term oriented approaches. The art lies in establishing patience in an environment that often offers little room for it.
For fund managers, the conflict often begins with LPs who traditionally focus on quick financial returns. Many funds are under pressure to deliver concrete results within a few years, making long-term strategies like Patient Capital difficult.
Another obstacle is the competition for capital. Short-term approaches — like investments in rapidly scalable SaaS models — often promise investors a faster return perspective, making patience appear unattractive.
Existing evaluation and reporting mechanisms also contribute to long-term strategies being disadvantaged. Standardized KPIs and benchmarks measure success primarily in financial categories, while social impact is often harder to quantify. This leads to patience being perceived not only as risky but also as difficult to measure.
However, there are ways to make patience in investing attractive and practicable. The first step is targeted communication with LPs: Instead of focusing exclusively on short-term returns, fund managers should clearly demonstrate the long-term value of their strategies. Regular updates highlighting not only financial but also social progress can help build trust.
New evaluation mechanisms and KPIs can also make a difference. By measuring both financial performance and social impact — through ESG criteria or impact ratings, for example — fund managers create a basis for legitimizing and evaluating long-term strategies.
Finally, strategic partnerships with long-term oriented actors like family offices and foundations can be an important lever. These investors often have less strict time horizons and are more open to approaches that prioritize both financial and social returns.
Implementing patience in an impatient market is undoubtedly challenging, but by no means impossible. With the right communication, innovative KPIs, and the involvement of long-term partners, investors can not only overcome existing hurdles but also establish a new norm — one where patience is seen not as a weakness, but as a strategic advantage.
The Underestimated Key to Sustainable Transformation
Patience in investing is often viewed as a luxury that few can afford. Yet this is precisely where its strategic strength lies. While short-term approaches promise quick gains, it has been repeatedly shown that the greatest successes require time and persistence. Patience allows investors not only to support companies financially but also to give them the space to fully realize their visions — whether in developing breakthrough technologies, establishing new markets, or creating long-term social value.
In the long run, this patience pays off financially as well. Companies that have time to perfect their products and business models can become market leaders rather than just achieving quick exits. Patient investments help drive not only transformative innovations but also promote sustainable and regenerative business models that contribute to global renewal.
Now it’s time for the investment community to actively implement this insight. Patience is not a contradiction to profitability but its strategic extension. Those who want to help shape the future must be willing to think beyond quick returns and invest in companies that can create real change. This requires a shift in thinking: a move toward models like Patient Capital, Impact Funds, and other innovative approaches that combine patience with strategic foresight.
The key to a more sustainable and transformed future lies not only in capital but in the willingness to give this capital time to truly make an impact. The path may be challenging, but the results — for investors, companies, and society — are undoubtedly worth it.
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*Source: Camebridge Associates
