How do you break into the impact investing sector as a career? We asked some of the top impact investors what skills they found the most important. Let’s listen in. I feel you have to have that hunger and the curiosity, and the willingness to learn because if you have a willingness to learn I think that changes the game and that
allows you to really make a thousand mistakes and still, come out with the 3 solutions that really work. You come in knowing that your hearts in the right place. You are doing this because you think the country needs it, the world needs it.
But just that might not suffice. You will also have to bring your analytical mind to this. This is a business that succeeds on the back of numbers, like it or not. The returns that you gun for have to be well planned for. The metrics that you track have to be well planned for, And actually computed and tracked over time.
It is a pretty complete set of skills that one looks for.
Well, I think the impact investing sector at this point in time is a very open sector. So if you are a young person passionate about the idea of actually making a difference to the lives of the people, you are a great volunteer, but if you want to really make a difference, you need to first probably either work with an entrepreneur or work with a business so that you at least understand what a business does. The second ladder to the idea is to figure out how do you actually make a difference? Do you have money to offer, do you have networks to offer, do you have skills to offer?
And is there a combination that you have together with you or you’re looking for an institution which has that, that will allow you to make that offer to an enterprise, in case you want to make a difference to an enterprise. So I would say a passion to make a difference. you know the work here is much more challenging and more complex than you know mainstream corporate or consultant or VC because you are entering a world of ambiguity. So just being very clear you know what is driving you towards making the transition is extremely important. So that is the first thing we test for, is passion. Start every day as a new day.
Past failures should teach you to improvise not to fall. and I think especially in this space, where its more people driven. Where its impacting lives or the environment, challenges will be there, right, but how you can really make it much more standardized using technology or processes would really help you sustain and survive and scale. Really the broader the experience that you can generate for yourself, the better it is. I would highly recommend everybody at some point in their life become a social entrepreneur and try that. And it will change your life. And the ability to become a more well-rounded investor is often times set in the stage of trying to do that in the first place.
So I look for enormous commitment and passion.
Which tells me that this is someone who is going to last the pace because it is a very tough journey in many cases. This is a space that you can shape. This is not something that you are going to become a cog in the wheel of a much larger organization, or entity often, or space. This is a space that is growing and can be continually shifted and change and adapted, and I think that’s really exciting. It is important to recognize and this is something we emphasize in the course that I teach as well, is that this is a finance course and there is actually the word investing in the phrase impact investing.
so I think the skill set that’s truly required, is that you got to be a good investor. You got to be able to analyze things that you’re going to invest in. You got to think about their business model like I said. You got to build out projections. So that would be the one skill that is critical. But the second critical is the empathy piece. Which is that both need to come together here. What tends to happen till now, and I hope that changes, is that as soon as you talk about impact investing, it becomes some soft kind of mushy thing, which will feel good if we do it. I don’t think that’s right.
I think you need to feel good while you’re doing it but it is investing. But if you think about the framework I just mentioned, whether its market based, concessionary capital or charity, you gotta be thinking about all those three in a rigorous analytical manner. So I think the skills are investing finance skills, understanding business skills and then I think also important, very important is the empathy piece. Which is that you know what, money here is not just to make a return it is to do good.