Guest Articles

August 16

Eva Yazhari

Going Beyond Capital: How Impact Investing Can Become More Accessible and Inclusive

While attending the Aspen Network of Development Entrepreneurs’ 2018 conference, I was taken aback by the results of an audience poll. Among the attendees at that session — most of whom were impact investors themselves — only about 38% said they had their personal investments in impact strategies. To me, this indicates a trend I’ve long observed in the sector: Despite their awareness of the need for more socially conscious investing, a majority of impact investors don’t know how to get started. And they often don’t realize that their time and their money are separate assets that can both generate impact.

If this is the case even among the most impact-oriented investors, imagine how it is among the general investing public.

In my new book, “The Good Your Money Can Do,” I introduce the idea of taking impact investing one step further and adopting the mindset of a “conscious investor.” I’ve found that this approach complements the ideals of the impact investing world and helps maximize the positive impact of the work that we do. It’s a more inclusive approach that lowers the barrier to entry to impact investing and makes the field more accessible, even to people who do not currently invest in the stock market. And despite the industry’s growth, it’s clear that more accessibility and inclusivity are needed.


Exclusivity Within Impact Investing

It’s exciting to be involved in such a dynamic, young industry. For a snapshot of how quickly it’s growing, consider that according to the Global Impact Investing Network’s 2020 survey of 294 leading impact investors, aggregate assets under management for repeat respondents were $98 billion, up from $52 billion in 2016. But the industry’s youth creates a number of obstacles for new investors. Despite an unprecedented amount of attention and investment, the field still suffers from a lack of standards around company social and environmental metric reporting. The so-called “alphabet soup” of reporting frameworks (from CDP to GRI and SASB) can intimidate newcomers and obscure the difference between genuine impact opportunities and impact washing.

There also continues to be a lack of customizable, value-aligned offerings available for the typical retail investor. These investors, who lack the wealth and access to specialized financial advisors enjoyed by accredited and institutional investors, often have to seek out and ask for opportunities that are hard to find or don’t yet exist. It’s up to them to introduce many of these concepts themselves — or to make the case for impact approaches to established financial professionals who may not yet see their value. Consider the mainstream financial advisor for a moment. Most aren’t used to providing more than pre-packaged options for their clients to choose from — which typically don’t include impact investments, and which lack any ability to customize (for example, by removing an investment the client disagrees with). They’re willing to tell us how to invest but aren’t asking us how we want to invest — especially when it comes to finding value-aligned options.

Finally, while anyone with investments can screen their holdings against environmental, social and governance (ESG) criteria, the more hands-on options are accessible only to wealthy individuals. For instance, while retail investors are largely confined to public equities, wealthy investors can pursue opportunities in other asset classes, from angel investing and venture capital to investing in private companies or creating a customized public equities portfolio. This limits both investment and other related opportunities for everyday investors — including access to impact investing networking groups. I owe much of my development as an impact investor to networking groups like Toniic, through which I’ve come to better understand my priorities, values and approach. Finding a community of like-minded people is an invaluable part of any journey, but in this space, it still requires a certain degree of wealth that not everyone has, due to accredited investor status requirements and yearly fees.


Expanding the Definition of Impact Investing 

The issue of exclusivity brings up an existential problem for impact investors. I think most of us recognize that impact investment is part of a larger paradigm shift toward a more equitable society. Along with ideas like purpose-driven business, servant leadership and conscious capitalism, it’s one of many tools that will help create a world in which businesses work for humanity, not the other way around. And yet, in many ways, impact investing reflects the rigidity of the traditional finance world, in which wealth is the key factor in determining who has access and who doesn’t.

For those of us who are involved in impact investing, matters of access fundamentally contradict the ideals of the work we’re trying to do. We’ll never create an economy that works for all stakeholders if those stakeholders don’t have a say in how we get there. This means that as impact investors, we have a responsibility to think beyond our investments and consider the state of the field itself and whether it too aligns with our values. It’s these big picture considerations that fortify the need for approaching conscious investment as a framework rather than a single strategy.

I’ve found that one of the most meaningful ways to do this is to approach impact investing as a lifestyle. For me, aligning my values with my money started with my portfolio, but I quickly found I could make an impact outside of my investments as well. As soon as I became aware that my money could never be neutral, I began paying attention to how I used it in other areas of my life. Consumer decisions, personal portfolios and even where you bank can be thought of as impact investments. Consider the banking example for a moment: Major banks are among the biggest funders of coal-powered projects, but many smaller ones aren’t. Finding an ethical option like a community development finance institution is an easy way to ensure that your money is supporting community projects rather than funding climate change. Re-examining these routine parts of our lives invites us to exercise more agency with what we own. Not only is this personally empowering, but it’s also much more inclusive.

The key here is to re-conceptualize impact investment as part of a greater movement and then think about simple ways to contribute. Yes, we can change the way we use money — but think about all the other resources at our disposal. Our time, skills, talents, relationships and ideas are all valuable assets that we can put to work for good. There is no one-size-fits-all approach to this: Instead, it’s an opportunity that anyone can take advantage of at any point. Viewing impact investing in this way is not only more accessible (we all have something to give), but it’s also a more flexible and realistic approach. All it takes is for each of us to think deeply about how else we can support efforts to build a better world and to do what we can with what we have.


Using Equitable Venture to Give Founders a Slice of the Pie

This same mindset — the recognition that all resources can be leveraged for good — is a key part of our investment strategy at Beyond Capital. Beyond Capital Ventures is a women-led emerging markets impact venture capital firm offering a diversified portfolio of seed and Series A companies in “need-to-have” sectors, led by conscious leaders. But, as our name suggests, we take investing “beyond capital” and provide our purpose-driven portfolio companies with value-add resources like legal advice, mentorship, sector-specific expertise and modelling assistance. It’s important to us that our companies thrive even after our exit, so we make ourselves available to support them for the long term. Our firm also strives to combat structural inequity in venture capital.

To that end, we’ve adopted a model that has been termed “equitable venture” — a more just approach to venture capital in which the fund shares profits with its portfolio companies’ founders. Borrowing the idea from stock option programs that attract talent to startups, equitable venture is a way to give a slice of the pie away while gaining much more in return, in the form of a portfolio driven by successful, highly motivated teams. In our second fund, Beyond Capital Ventures, portfolio companies that meet performance milestones can earn a profit share in the fund. I’ve always believed that the pie is not finite and that we can all succeed together. We see our portfolio company management teams as key stakeholders and want them to have a stake in our work.


Making Impact Investing Inclusive

We also recognize that it’s important to use our work to support needed changes in the broader industry. Nearly 40% of senior impact investing decision-makers are female, which is significantly better than the 4% in traditional finance. But we can still do better. Impact investing has the potential to be more democratic on all fronts, but what’s true in finance-at-large is true in our sector as well: Diversity won’t come without substantively re-thinking our basic practices. Biases lurk in hiring practices, due diligence and promotion criteria, to name just a few areas that are worth re-examining. For instance, consider a 2019 study by the W.K. Kellogg Foundation, which connects the innocuous-seeming practice of peer-network recruiting to the racial and cultural homogeneity of finance.

But when it comes to introducing a wider audience to impact investing, sometimes creative solutions are best. At Beyond Capital, we created an Ambassador Program to open up our work to interested community members. With a small donation, participants can familiarize themselves with the benefits of impact investing first-hand without having to be accredited investors, as they’re introduced to the industry through the investments Beyond Capital is making. They can also engage with the larger community through networking events with entrepreneurs and industry professionals. Even without a program like this, I always encourage people to take the initiative and create their own conscious investing groups or get involved with initiatives like Invest for Better. There are so many opportunities to meet like-minded people committed to doing good, and you’d be surprised to find how willing most people are to get involved in the movement.



Speaking as a woman with experience on both Wall Street and in the impact investment space, there is a distinct need for underrepresented groups to be equal contributors to business and finance. It is ironic — though perhaps only natural — that impact investment has replicated the biased and exclusive side of traditional finance. Still, I think that expanding what we think of as “an impact investor” can give us a unique advantage when it comes to lowering some of the barriers to entry. Treating impact investing as a lifestyle, and thinking more creatively about all your resources as a form of investment capital, is one of the most compelling ways to make the industry more accessible. Regardless of wealth or accredited investor status, we certainly all have something to contribute. After all, we can’t create a system that works for everyone if not everyone has a say in what it looks like.

The beauty of this approach is that you don’t have to wait until you have a certain net worth to get started. You don’t have to wait until a lucrative opportunity crosses your path. Anyone can choose how they want to contribute and to what degree — the most important thing to do is just to start somewhere.


Eva Yazhari, General Partner of Beyond Capital Ventures, CEO/Founder of Beyond Capital Fund and author of The Good Your Money Can Do.


Photo courtesy of geralt.



ESG, impact investing, venture capital