In addition to my work with Reinventure Capital, I do a lot of founder mentoring (with MIT VMS, among others), teaching (Innovative Social Enterprises, at Tufts University), and speaking and pitch competition judging in the US and abroad, as a longitudinal commitment to cultivating the entrepreneurial ecosystem.
Across all those varied settings, one of the refrains I find myself repeating with increasing frequency is sooner is better than perfect.
That reconstructed adage doesn’t only apply to entrepreneurs preparing to launch new enterprises. It is every bit as apropos to capital allocators and investors contemplating new impact investing initiatives, and even more timely given the traditional start of the summer season.
Why soon?
Whether or not you have already declared a social / racial / gender (or any other) impact investing mandate, the opportunities are patent. For those seeking direct investments, there is a bumper crop of young growing companies in search of capital to scale — many of them led by diverse founder teams and targeting measurable impact. For those seeking funds, there is a small but growing population of diverse-owned managers demonstrating competitive performance.
As astute entrepreneurs and investors know, the early bird very frequently gets the worm captures superior returns. Moreover, you’ve probably already found that summer is no longer the sleepy season it used to be. We are seeing an increasing number of LPs, fund managers, and founders closing rounds in June and July, and not idling away the weeks until Labor Day.
Why not perfect?
Before we go any further, let’s acknowledge that it’s tempting to want to work out a comprehensive, detailed, precise plan before embarking on anything new. And to be certain, no one should undertake any new investment strategy without first acquiring at least basic situational awareness of the associated opportunities, risk, and context.
However, it’s also worth acknowledging that perfect strategies or plans only exist on paper.
In the real world you can be assured that No battle plan ever survives contact with the enemy. Or if you prefer a civilian authority on the subject, In theory, theory and practice are the same. In practice, they are not. [perhaps misattributed and paraphrased]
Empirical evidence also shows that to replicate the successes of entities like Kapor Capital requires both a significant leap to begin, and also intentional, ongoing redesign of both process and organization. Analysis and preparation are necessary, but not sufficient. Only by being put into action can an effective strategy take shape.
Start succeeding.
Never mind ‘fail fast’. Although that mantra has become reflexive in some quarters, that’s not what any of us are looking for.
Rather, stop failing slowly: waiting (for someone else to go first, for all the unknowns to be eliminated, for more evidence, to formulate a comprehensive, fully articulated and vetted strategy, etc.). That delay may feel like prudence, but it’s really just failing to move forward.
Instead, start making modest investments, and treat them as experiments in learning how to succeed at this new practice.
The Intent Manifesto / WOCstar / WE Capital / NYC partnership provides an excellent illustrative example. Recognizing the abysmal statistics facing female founders — especially women of color — and seeking to increase economic vitality of the city, Deputy Mayor for Housing and Economic Development Alicia Glen sought to undertake specific interventions that would “actually move the needle.” Based on input from women entrepreneurs in a wide variety of businesses and stages of development, the city launched a suite of offerings in partnership with newly formed and existing entities such as the WOCstar Fund to provide $10M in catalytic capital. It’s a tiny amount compared to other initiatives the city is accustomed to funding, but as the city’s first foray into investing for racial + gender + economic impact, it is large enough to generate meaningful, measurable results, and to serve as a foundation for further initiatives deploying substantially larger sums.
Go in good company.
Like Deputy Mayor Glen, you don’t have to go it alone. You can partner with aligned individuals and organizations to “lock arms and move forward against the current,” as Daryn Dodson put it. But don’t imagine that you’ll be able to find all — perhaps even any — of the partners you seek in large established firms. Like Deputy Mayor Glen, your allies will most likely be people and organizations who are unfettered by perceived best / safe practice (which so often is anything but), and those are rarely found among the large incumbents. Take Natalie Molina Nino’s advice to heart and recognize that in order to achieve different outcomes you will need to change your systems and work with new and emerging entities.
There are numerous excellent candidates, many of whom we have featured in previous blog posts.
You can do this. We’re happy to help.
For our part, Reinventure Capital is working from the impact investing playbook Ed originally pioneered in the 1980s and 1990s, investing in overlooked, undervalued founders to grow profitable, value-creating enterprises.
Specifically, we are focused on deploying equity and debt capital in expansion stage (breakeven or so) companies led by people of color and/or women, across the US. The Reinventure approach is proven effective at creating real, measurable social impact in collaboration with the company founder teams, generating meaningful ripple effects for their stakeholders, and as a result, delivering non-concessionary returns to investors.*
We are proud to be in extraordinary company of many others who are also choosing to recognize opportunity and allies among the people the system cannot yet perceive. If you haven’t started yet, now is an excellent time to begin.
We are actively recruiting LPs, and new allies are always welcome. We would be delighted to help you make your first social impact investment — please join us!
Are you already deploying capital to achieve better outcomes? Please share! Or better yet, take the conversation to your network to let others know they are not alone!
*While there’s no such thing as a guarantee in investing and no one can reliably predict the future, Ed’s prior track record provides direct evidence that it is indeed possible to consistently invest for both financial returns and social value creation. If you are an accredited investor and would like to learn more about investments that can advance social, racial, and gender equity by supporting high-value companies led by women and/or people of color, please contact us to start that conversation.
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