Impact investing has become an extremely popular sector, providing both a stable career and an opportunity to make a difference. Business and social entrepreneurs are working to make improvements in areas including energy, education, health, economic empowerment, and food security, to name a few.
What are your options?
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 issue or a country, region, or community in need. If you are interested in the field you should pursue a career in impact investing regardless of your gender or race. As impact investing continues to grow, diverse students and young professionals should be encouraged enter the field and use their diverse perspective as an asset to the organization.
Next, you must know your 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 investments.
Due diligence — Team members dive in, analyzing financial statements and models, scheduling calls, and conducting field visits
Investment terms — The team develops investment terms and negotiates with entrepreneurs or organizations. The investment is made once the investor and invest sign off on a 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.
How do you get there?
There are many roles you can take to become an impact investment professional.
If you have an MBA, finance degree or past financial experience, focus on hard skills. For example, if you have strong analytical skills you could be responsible for analyzing the social, environmental, and governance (ESG) performance of companies. But 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 what transferable skills you have gained from your career path. For example, if you have strong communication skills, look for a marketing or communications role with an impact investing company that needs to better articulate their stories and create connections for potential investors. If you have experience in environmental science you could work for an investment firm that focuses on renewable energy and sustainable technology. Non-profit experience could lend itself to a career where you help bring impact investing to a non-profit by pushing for their financial portfolio to be invested in a manner consistent with their mission.
Build your network
Impact investors must also have a strong network and dedicate time to keeping their network engaged. It’s often easiest to start close to home, i.e. your friends and family. 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 your investing endeavors, provide advice or mentorship, or who can co-invest.
Impact investing is still in a growth stage and there are tremendous opportunities in the field for you to find the right path.
Want to learn more about building a career in impact investing? The Net Impact Conference, October 26-28, will help professionals of all stages turn passion into a purposeful career.