Notes from the frontier.

The case for impact-first capital in India

Over the last decade, I have seen the journey of over 200 impact entrepreneurs through The/Nudge Incubator, Accelerator and Prize challenges. The for-profit founders among them came to us through our Prize challenges, and watching them, I saw one pattern repeated. Early money arrived in small amounts, from angels and incubators. The round that takes a company mainstream either never came, or came years later than the business deserved.

There Is No Such Thing as Impact Investing

In his provocative article, There Is No Such Thing as Impact Investing, Kevin Starr challenges the increasingly broad use of the term “impact investing.” We believe its most useful argument is the need for honesty: What return is the capital targeting, what risk is it assuming, and what would not happen without it? Intentions alone do not create additionality. Impact-first capital earns its name when it is willing to be more flexible or risk-tolerant to make an important solution possible.

Is Development Innovation a Good Investment?

In their paper, Is Development Innovation a Good Investment?, Michael Kremer, Milan Thomas, Sasha Gallant and Olga Rostapshova find that USAID’s Development Innovation Ventures portfolio generated an estimated social benefit of more than $17 for every dollar invested, even using a conservative methodology. The returns were highly concentrated, with a few innovations accounting for most of the impact. For us, this reinforces the importance of portfolio thinking: experiment affordably, learn quickly and direct more capital towards solutions that demonstrate impact, cost-effectiveness and the potential to scale.

New Study Reveals the True Cost of Impact-First Investing

In its study, New Study Reveals the True Cost of Impact-First Investing, the Miller Center for Global Impact finds that impact-first funds can be efficient per investment while costing more per dollar deployed because of smaller cheques and more intensive support. We believe this is often the cost of inclusion, not inefficiency. Fund economics designed for large-ticket private equity cannot simply be replicated when investing in early-stage ventures and underserved markets.

India Has a Growing Impact Investing Industry, but Can It Scale?

In her article, India Has a Growing Impact Investing Industry, but Can It Scale?, Adva Saldinger highlights an important structural gap that can be obscured by the industry’s headline growth. As impact funds become larger, they often gravitate towards bigger cheques, later-stage companies and sectors where commercial returns are already visible. Yet without sufficient early-stage capital, the pipeline for larger funds will eventually weaken. For us, scaling impact investing must therefore mean not only mobilising more capital, but also preserving risk-tolerant capital for new sectors, unproven models and underserved markets.