This is the second in a three-part series of guest blog posts by The Consortium’s strategic partner Net Impact, which mobilizes new generations to use their skills and careers to drive transformational social and environmental change. In this segment, we also include a video featuring Consortium alumnus Andrew Hill (Berkeley, ’16), CEO and cofounder of LiftEd, which created a mobile platform for special education management.
Impact Investing has become an extremely popular sector, providing both a stable career and an opportunity to make an impact. This relatively new field of impact is attracting young professionals all over the world and you could be one of them. In part 1 of our blog series, we introduced you to impact/socially responsible investing. Now let’s discuss how you can get involved in this growing field and make an impact.
Reminder: Impact investments are investments made with the intent to generate both positive impact and market rate returns.
How to get started in impact investing
When considering a career in impact investing, it is important to think about where you can make the greatest impact. Think about what interests you — whether it is a specific environmental or social area in need, or a skill set you have. One important question to ask: Why do you want to invest responsibly? These types of questions are often asked by interviewers, so prepare examples that demonstrate your professional and personal commitment to your passions.
Next, you must know your options, because wherever you are on your career path, you do have options. Start by understanding the entire cycle of an investment and the types of careers available at each stage:
- Sourcing leads: Analysts and associates conduct primary and secondary research to identify potential investees for their organization.
- Due diligence: Team members dive into organizations, which includes analyzing financial statements and models, scheduling calls and conducting field visits.
- Investment terms: The team develops their investment terms and negotiates with the entrepreneur. The investment is made once the investor and investee sign off on the term sheet.
- Value add: Investors add value to entrepreneurs through capacity building. Assistance can range from help in developing baseline metrics to identifying and recruiting board members.
- Impact evaluation: Analysts track and measure an organization’s social and environmental impact on the communities it serves.
Andrew Hill’s story
Watch a brief video featuring Consortium alumnus Andrew Hill (Berkeley, ’16)
Where to focus your time
If you have a financial background, an MBA, finance degree, or past financial experience, focus on your hard skills. You can tailor your search to career areas that fit best with the skills you already have. For example, if you have strong analytical skills, you could have a job where you analyze the social, environmental, and governance (ESG) performance of companies. If you have strong communication skills, look for an impact investing company that needs to better articulate their stories and create connections for potential investors.
Not all areas within impact investing need a prior investment banking or corporate finance background. If you don’t have a financial background, focus on your past experiences and what transferable skills you have gained from your career path. For example, if you have a degree or experience in environmental science, you could work for an investment company that invests in renewable energy and sustainable technology, or if you have nonprofit experience, you could work to bring impact investing to a nonprofit by pushing for their financial portfolio to be invested in a manner consistent with their mission.
If you are interested in furthering your education, an MBA, MPA, MSW, or other relevant advanced degree can provide valuable skills to make you stand out as a candidate and many graduate schools offer courses in impact investing.
Finally, it’s helpful to build your network. It’s often easiest to start close to home (i.e., your friends and family). Impact investors must also have a strong network and dedicate time to keeping their network engaged. Once you have narrowed in on the impact investing area of most interest to you, make connections with professionals working in that sector.
Building relationships is an important skill as investing is all about relationships between you and the founder and/or company in which you are investing. Find the people to support you in your investing endeavors, provide advice or mentorship, or who can co-invest with you. You can gain tips for effective networking here.
Impact investing is still in a growth stage and there are tremendous opportunities in the field for you to find the right path.
Related posts in our series
“Career Opportunities in Impact Investing.” Columbia SIPA, July 2014. Accessed 27 March, 2017.
Foley-Wong, Bonnie. How do I get into Impact Investing? Quora, 5 Oct., 2016. Accessed 27 March, 2017.
Net Impact. Impact Investing Portal, 2016. Accessed 27 March, 2017.