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Stop Listening to Investors
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When Our Ambition is Our Enemy
Are Startups in a "Silent Recession"?
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Michelle Glauser on Diversity and Inclusion
The Utter STUPIDITY of "Risking it All"
Committees Are Where Progress Goes to Die
More Money (Really Means) More Problems
Why Most Founders Don't Get Rich
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We Can't Grow by Saying "No"
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Is the Problem the Player or the Coach?
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The Value of Actually Getting Paid
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Wait a Minute before Giving Away Equity
You Only Think You Work Hard
SMALL is the New Big — Embracing Efficiency in the Age of AI
The 9 Best Growth Agencies for Startups
This is BOOTSTRAPPED — 3 Strategies to Build Your Startup Without Funding
Never Share Your Net Worth
A Steady Hand in the Middle of the Storm
Risk it All vs Steady Paycheck
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How to Recruit a Rockstar Advisor
Why Having Zero Experience is a Huge Asset
My Competitor Got Funded — Am I Screwed?
The Hidden Treasure of Failed Startups
If It Makes Money, It Makes Sense
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$10K Per Month isn't Just Revenue — It's Life Support
The Ridiculous Spectrum of Investor Feedback
Startup CEOs Aren't Really CEOs
Series A, B, C, D, and E Funding: How It Works
Best Pitch Decks Ever: The Most Successful Fundraising Pitches You Need to Know
When to Raise Funds
Why Aren't Investors Responding to Me?
Should I Regret Not Raising Capital?
Unemployment Cases — Why I LOOOOOVE To Win Them So Much.
How Much to Pay Yourself
Heat-Seeking Missile: WePay’s Journey to Product-Market Fit — Interview with Rich Aberman, Co-Founder of Wepay
The R&D technique for startups: Rip off & Duplicate
Why Some Startups Win.
Chapter #1: First Steps To Validate Your Business Idea
Product Users, Not Ideas, Will Determine Your Startup’s Fate
Drop Your Free Tier
Your Advisors Are Probably Wrong
Growth Isn't Always Good
How to Shut Down Gracefully
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Can Entrepreneurship Be Taught?
How to Pick the Wrong Co-Founder
Staying Small While Going Big
Investors are NOT on Our Side of the Table
Who am I Really Competing Against?
Why Can't Founders Replace Themselves?
Actually, We Have Plenty of Time
Quitting vs Letting Go
How Startups Actually Get Bought
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Startup Financial Assumptions
Why Every Kid Should be a Startup Founder
We Only Have to be Right Once
If a Startup Sinks, Founders Go Down With it
Founder Success: We Need a Strict Definition of Personal Success
Is Quiet Quitting a Problem at Startup Companies?
Founder Exits are Hard Work and Good Fortune, Not "Good Luck"
Finalizing Startup Projections
All Founders are Beloved In Good Times
Our Startup Culture of Entitlement
The Bullshit Case for Raising Capital
How do We Manage Our Founder Flaws?
What If my plan for retirement is "never retire"?
Startup Failure is just One Chapter in Founder Life
6 Similarities between Startup Founders and Pro Athletes
All Founders Make Bad Decisions — and That's OK
Startup Board Negotiations: How do I tell the board I need a new deal?
Founder Sacrifice — At What Point Have I Gone Too Far?
Youth Entrepreneurship: Can Middle Schoolers be Founders?
Living the Founder Legend Isn't so Fun
Why Do VC Funded Startups Love "Fake Growth?"
How Should I Share My Wealth with Family?
How Many Deaths Can a Startup Survive?
This is Probably Your Last Success
Why Do We Still Have Full-Time Employees?
The Case Against Full Transparency
Should I Feel Guilty for Failing?
Always Take Money off the Table
Founder Impostor Syndrome Never Goes Away

How to Navigate the Impact Investing Landscape

Victor Grau Serrat

How to Navigate the Impact Investing Landscape

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The term Impact Investing was coined in 2007 to refer to “investments made with the intention of generating both financial return and social and/or environmental impact”. Less than a decade later, impact investing now boasts $77B in assets, with $15B invested in 2015 alone — a 30% increase from the previous year — and is expected to grow by a factor of ten over the next ten years. For comparison, $141B was invested in venture capital worldwide in 2015, but experienced a decline of 10% in 2016 in total deal funding.

With such growing interest in this approach to investing from a great variety of stakeholders, impact investing inevitably means different things to different people ranging from investments in luxury car manufacturer Tesla, to pay-for-success contracts to reduce recidivism or products and services that benefit people living in poverty in developing countries.

Impact investing then becomes a catch-all term to encompass investing in any company casually doing “some good” in detriment of those intentionally seeking to affect measurable positive change for society and the environment.

One space where impact investing has started to affect social change and can become transformational is in addressing global development challenges. The landscape depicted above highlights the slice of impact investing that focuses on global poverty, social inequality and economic growth in the developing world. And just to be clear, impact investing is *not* the silver bullet that will end poverty, but is a complementary approach to philanthropy, government interventions and others that can foster much needed economic development and prosperity.

The segment of impact investing that addresses issues of global poverty is thriving, but much like the rest of the impact space, there seems to be a mismatch between capital supply and demand. The majority of investors are looking to invest in growth or mature companies, but report a shortage of quality investment opportunities. The lack of deals is especially acute for institutional investors at the end of the pipeline. On the other hand, dynamic and thriving small and growing enterprises suffer from the ‘missing middle’: the financing needed for companies to scale their businesses and their social impact; right in the middle between micro-finance and commercial loans.

How to navigate this landscape?

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  • If you are a social entrepreneur, you may start refining your idea through an incubator or grow through the formation stage of your venture through an accelerator. You’ll find them in major cities with a broad focus (Atlanta, Melbourne, New York, Seattle or Singapore), or in specific geographies (Brazil, Chile, India, Mexico, South Africa). While most are on-site, some are also online (GSBI, B4B).
  • As an entrepreneur, you’ll gain additional visibility through competitions, awards, and fellowships. While you can apply to some, others are by nomination only, so get to know this space and build your network over time.
  • If you are an accredited investor, there is no shortage of investment opportunities to get involved, and many funds are actively fundraising at any given point. As of this writing, ImpactBase reports 150 open funds with existing commitments and another 50 that have just started fundraising. If you want to invest directly, take a look into the Investing Marketplaces in captured in the landscape.

This vibrant and expanding landscape is where Colorful Ventures operates, focusing on early-stage companies with built-in impact. Our vision is to grow the number of successful companies that make a lasting positive change in this world, and catalyze a vicious circle that attracts more capital, resources and talented entrepreneurs working for a more just and equitable world. While we acknowledge that impact investing alone is not the panacea to end global poverty, we believe that market-based approaches have a big role in alleviating poverty, and we work hard to realize this potential.

Find an interactive version of the above landscape here.


Also shared on the Startups.co Medium Publication

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