Over recent years I've had a number of people (many well known in their respective fields) describe me as amongst other things an impact investor, philanthropist or angel investor. Quite often on hearing this I would smile wryly and we would end up in an animated and engaging discussion as to what each title meant. More often than not if a tag was needed to describe my input I would simply describe myself as a "backer" (often I was quite a substantial backer.)
This has now happened in a number of the areas I work in and it reinforced to me that the tags we apply to people are of themselves intriguing. But that is a discussion for another day. What I wish to touch on here is why I've settled on the term "venture investor" (as opposed to angel or impact investor - or indeed philanthropist.)
To give you some background we need to go back a few years, well a decade. It's nearly a decade since I decided to adopt the "giving pledge" model, although at that time it had not been talked about or named. I set up a structure which means certain charities or purpose driven entities will benefit if I was (to put it colloquially) run over by a bus, and before. I was at that time skirting the 40 year old mark and I had had a fairly serious health alert. To me it made absolute sense - and it still does. It is part of my persona - although until now I have not spoken of it widely.
Even then I would not have called myself a philanthropist, and I still have some difficulty with the tag - to the amusement of some.
The approach I've taken has been built in part on some fabulous writings, and I include amongst them an article first published in the Washington Post in 2013 by a young fellow who is now well known - "Join Wall Street. Save the World" was the title. In essence the fellow used his investment skills as a young wall street analyst to fund his generous and innovative philanthropy. There is nothing new in this, it is just that not many people (especially so young) talk about what they do and most do not do it to the incredible extent of this particular individual.
As someone who had always been a keen and strong investor the concept of investing for purpose seemed obvious, as did socially responsible investing. (My father had been a bishop for 25 years, so from a very early age I had instilled in me the concept of giving.) But for me the real purpose and importance of giving came not from my father's occupation, but from other life experiences I've had.
Once I had settled on the giving pledge concept I decided how to optimise the situation. By chance in 2012 I read a book by the Harvard Professor Michael J Sandel "What money can't buy - the moral limits of the markets" - it's a book I've recommended to many people over the years (possibly some of you reading this today). He touched on the unethical use of money which pervades society, but from it it reinforced to me the real opportunity for people to invest in the right way enabling ventures to have impact - in other words, impact investing. Again at that time (2012) the term "impact investing" was not in common use, and it was not used by anyone I knew. To me though it sat well alongside the giving pledge.
Then came the debates - was impact investing the same as angel investing? The reality is they are different - quite different. Angel investors (of which I am one) have a formula they follow and most often a venture which requires impact investing simply will not meet that formula. So, in short I'm an angel investor and an impact investor, or as I prefer to be called - a venture investor (and I sometimes add "with a philanthropic twist"!)
As many of you will know the philosophy behind angel investing differs from impact investing. While angel investing and philanthropy on any strict analysis have nothing in common, impact investing has strong and important synergies with philanthropy. The reality is many philanthropists are impact investors and vice versa - the two sit well together and complement one another.
Hopefully in time impact investing will become commonplace - it's enormously rewarding to see and talk with some of those behind cutting-edge ventures with real purpose. I also hope more people in New Zealand will consider or encourage the giving pledge model. If this post has resulted in you discussing what you define as impact investing, whether you would do it or what you think of the living pledge, then my penning this has served a purpose.
Hope this is of interest, and I'm happy to field any comments.