How Jacqueline Novogratz invests for global change

There is a lot of money out there in the world looking for investment opportunities that can generate financial returns. Some of that money comes with a twist. It's held by people or institutions who don't just want to grow their wealth, but also want to see it affect real positive change in the world. Some of them might be willing to realize less of a return if it means achieving greater impact. Some might be philanthropic donors or institutions who believe in the power of markets and entrepreneurship to solve big problems. This is the world of impact investing, and it's a world where Jacqueline Novogratz, the founder of Acumen, has operated for a long time.

It's also a

world, she says, that is due for a reckoning. Why aren't investors and philanthropists taking bigger risks and making bigger bets in places full of need and opportunity? What stops potential impact investors from taking that first leap, the one that can really make a difference? I came into this conversation geared up to talk about numbers, finance, returns. We ended up talking a lot more about people and character and leadership. And investment is also a relationship, and Jacqueline has helped build a lot of them. Here's Jacqueline Novogratz. Jacqueline Novogratz, thanks so much for joining the podcast.

Thanks, Michael. I'm a super fan of DevEx and really excited for your new podcast.

Love to hear it. For those who are not in the weeds of impact investing, let's begin very simply. What is it? And can you sort of map the constellation of different actors that impact investing tends to bring together?

Goodness. To your point, you ask 10 people, you get 10 different answers. But in brief, from my perspective, impact investing is is essentially using your investment dollars to create change in the world. That then opens itself to a broad spectrum that goes from some of the work that Acumen does in pioneer investing, raising philanthropy and investing it as long-term equity or debt, looking for capital preservation so that you can reinvest for more innovation and the building of markets that have never existed. It moves through where Acumen also works today, which would be those vehicles, specifically set up for impact with LPs who are looking for a specific financial return, usually not quite as high as the end of impact investing where you've got another whole segment of investors that are looking to get market returns and also do good on the side.

OK, I'm glad I asked. So one of those things that sounds simple or maybe straightforward and then opens up this range of complicated roles and responsibilities. And, you know, I think that's that will pave the way for the rest of our conversation here is how does all of this work? Before we get into that, though, I mean, your own story here is fascinating. You've written a book about it, about your transition from banking into impact investing. I'm not going to ask you to summarize the book. Folks should go out and read it. It's called The Blue Sweater. But maybe as a version of that story, can you just give a sense of why it is that you decided to center your professional life around this model of affecting change? There

are a lot

of ways