‘Unpacking Impact’: Impact investing for Inclusive Business

Niek van Dijk
By on October 5, 2016

On September 28, the Inclusive Business Accelerator and Impact Hub Amsterdam hosted a session on inclusive business as part of the Amsterdam Capital Week’s Capital Impact day, providing investors and entrepreneurs with the opportunity to share their views on impact investing.

‘Thinking outside of the box’ was the main advice, as participants gathered to crack the mystery of how to scale inclusive businesses and drive impact investment to the next level. The session featured introductory presentations by SimGas and Inclusive Impact Investments, both active on the IBA online platform, followed by an interactive discussion between participants on the perspectives of investors and entrepreneurs.

Investors: where are the good entrepreneurs?

“There are plenty of good ideas, there are not many good entrepreneurs”. Investors weighed in on what they expect from entrepreneurs, what mattered most being the quality of an entrepreneur. The argument was that even if a business idea is brilliant, the most important part of the business is the driving force behind it. “If you don’t know answers to the key questions about business and entrepreneurship, it is not worth it”, said an investor, acclaimed by the audience.

The feeling was that there is a general overload of ‘entrepreneurs’ who do not actually embody the core of the term, the idea of creating value for customers. In addition, mastering the basics of entrepreneurship was critical to a lot of investors in the room.

Entrepreneurs: Unrealistic expectations

Entrepreneurs in the room also had a few things to say and were quick to list a number of frustrations they face in dealing with investors. The main concern? The unreasonably high expectations weighing on startups; as one entrepreneur puts it, “due diligence is key for investors, but it can be overrated. The balance sheet cannot really look great from the beginning of the entrepreneurial journey, it takes time”.

Entrepreneurs expressed their frustration at the complexity of some impact investors’ reporting processes, with more and more of them turning to traditional investors.

Conclusion: Inclusion for who?

One last noteworthy discussion was around the topic of ‘inclusion’. Is inclusion always good? A participant pointed out that increasingly, people in vulnerable situations may end up worse off, having no voice when the inclusive business they are employed by, decides to reduce the costs or making strategic decisions that affect their lives negatively. “Inclusion is good when you empower people and enable people to make changes in the company’s success”.  Inclusiveness is not necessarily about inclusion itself but also about the extent this inclusion really improves the lives of the ones included.

For more information about the Capital Impact event at Amsterdam Capital Week, visit 
http://www.capitalimpact.nl/ or see this Storify page with tweets about the event.