Why I am NOT an Impact Investor

The Colorado Capital Conference (in Denver 10/8-10/9) announced its list of presenting companies today and it has solidified my decision to STOP IMPACT INVESTING.

I realize this may be a strange decision for the co-founder of the Impact Angel Group to make, but here is my thinking:

  1. I think it’s a terrible idea to brand yourself and your investments as “impact” because people automatically think an impact investment will yield a lower financial return. I am seeing more and more opportunities that do not have a financial trade off and branding them as “impact” would be a grave disservice. More thoughts on this.
  2. Our angel groups are already impact investing, they just don’t know it. As I mentioned, the Colorado Capital Conference announced its list of presenting companies and five of the 11 companies are what I would consider to be “impact” investments. If we call them out as such however, I guarantee fewer angels will attend their presentations.
  3. We don’t need another silo. We have thousands of angel groups, accelerators and incubators to help our early stage companies but: 1) they all have different funding applications and due diligence processes and 2) are fighting for the same sponsorship dollars and the interest of the fragmented investor community. The result: an incredibly frustrating and time consuming process for the entrepreneurs, and a very unclear path for the investors.
  4. We can make existing organizations stronger. Instead of creating new “impact” organizations to detract more resources and waste even more of our entrepreneurs’ time, we should be assimilating into existing investor networks to make them stronger and encourage impact from within.

In summary, I think we should stop wasting time defining impact (it’s in the eye of the beholder anyway) and creating “impact” investing organizations, and just start INVESTING.

What does this mean for the Impact Angel Group? Well, we founded this organization to support rather than detract from other organizations, which is why we don’t charge a membership fee and we only hold events in partnership with other organizations. But…we are seriously considering dropping the whole impact thing.

What do you think? Can we all just be closet impact investors and be done with it??????

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6 Responses to Why I am NOT an Impact Investor

  1. Audrey says:

    Nice blog, Elizabeth. Labeling things usually detracts from what the real heart of the matter is. A good opportunity is just that, no reason to try to stick it into a box to appease funders.

  2. Kelly says:

    Most entrepreneurs could (and should) argue that their investment opportunities are impactful, but are they impact investments? The definition and execution is indeed in the eye of the beholder/investor. And, BTW, where are the social and impact investment success stories? Has the sector done a poor job of not putting their success stories forward, or are there none?

    • Great Comment Kelly. I think the industry has done a poor job of putting their success stories forward, but I have seen some interesting ones. Here are three angel impact successes:

      Orion Systems: IPO in 2007, 67% growth / $72.6 million in 2008

      Honest Tea’s annual growth rate of 66% = purchase by Coca-Cola in 2008

      Energia Global – acquired by Enel Latin America in 2001 for $74 mill

      But I’d love to have more like this!

  3. Some great thoughts here. I wonder if the answer is somewhere in the middle… continuing to use the group to educate angels (and entreprenuers) about the opportunities, but double down on your idea of doing events only with other partners.

    In other words, help investors see the potential of impact investing, but then drive them to apply that excitement through RVC, OAF, and other “not-specifically-impact” channels.

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