TL;DR: Impact-first investing demands finding the right fit over rigid traditional frameworks. This piece explores how listening can rebalance power dynamics before you deploy capital – and provides a practical approach to transition from listening to designing responsive capital structures.
When I think about impact-first investing, I often reflect on the subtle power dynamics between investors and investees. These dynamics can unintentionally shape structures in ways that don’t fully support the investee’s reality in creating impact. Recognizing and balancing that power is essential – it allows us to listen, understand, and design investment structures that are both practical and impactful. It also allows us to show up as a partner, as someone who’s aligned on the mission and vision of the investee.
Ultimately, a good structure emerges from listening and asking the right questions.
Section 1: Intentional Shift in (unspoken) Power Dynamics
Solution
“You’re the first investor who introduced themselves first.”
The founder who said this meant it as a small gesture of appreciation for showing up as a person first instead of just an investor, but it stayed with me. That moment made me pause and ask a bigger question: How often do we, as impact-first investors, unintentionally reinforce the very power dynamics we say we aim to improve?
As an Investment Analyst, I support the end-to-end investment process connecting impact investors and mission-driven businesses across industries and capital types. I often find myself in conversations that aren’t just about capital – but about how people feel in its presence. I’ve heard founders describe feeling unseen or uncertain about what capital structures are available to them. I’ve heard investors, too, express frustration about misalignment, misunderstanding, or a similar lack of clarity around flexible tools available to them. The truth is, both sides want the same thing: partnership built on trust, transparency, and clarity that create impact.
At Impact Charitable , we believe that listening starts with self-awareness. The more conscious we are of how we enter the room, the more room we make for others. As a responsive philanthropic capital intermediary, we have designed 18+ unique pathways, deploying $100M, that unlock and accelerate capital to both nonprofit and for-profit ventures.
From revenue-based financing to patient, supportive loans to milestone-based forgivable structures, this diversity exists because we’ve listened to what founders actually need, not just what traditional finance offers.
What It Really Means to Be Relationship-Oriented in Impact-First Investing
Solution
“Relationship-oriented” is one of our core values at Impact Charitable – but early in my role, I often found myself asking, “What does that actually mean in practice?
For many impact-driven organizations, securing capital isn’t just about finding funding – it’s about finding the right kind of capital and the right partner. Yet, in most investment conversations, there are unspoken assumptions about who holds the power. These assumptions often tilt the discussion in favor of whoever brings the money, not the mission. At IC, we question those assumptions. We believe that expertise comes in many forms and people can surprise you if you make the space for them to do so.
Solution
We start our transactions by listening, we ask: What kind of capital do you actually need and what are your ideal terms?
Founders know their businesses best. They understand their communities, their timelines, and what success really looks like. When we do offer our perspective, we share the why behind it. Transparency – both about what we can offer and why – builds the foundation for trust and honest communication. And lastly, when we show up as our full, human selves, it reminds founders that their partners aren’t just institutions – they’re people, too.
Solution
We’ve found that when we treat founders as collaborators instead of recipients of capital, the entire tone of the relationship changes to a partnership rather than a pitch.
Relationship-building isn’t separate from structuring capital – it’s what makes structure effective. It brings honesty in the conversations, which makes it easier to surface real pain points – both financial/business and emotional. This insight allows us to develop responsive structures. Our job at Impact Charitable is not only to move capital but also to shape how it moves. So, in my role, I strive to strike a balance that both meets the needs of the investor and the investee, as well as design the “how” of capital deployment based on each unique transaction.
Our listening-first approach has attracted partnerships with leading institutions: most recently, the JPMorgan Chase Foundation selected Impact Charitable to manage a $2.1M fund supporting underserved entrepreneurs acquiring businesses. This partnership which includes New Majority Capital reflects the trust that comes from demonstrating how responsive capital structures can fill critical financing gaps.
Section 2: The Questions That We Ask Ourselves and a Practice Toolkit
The mismatch between the capital structure or financing covenants and the business model can often slow down business growth, prevent promising enterprises from scaling their model or sometimes even force them to pivot away from their mission. When we think about financial instruments and/or financing covenants, in addition to ensuring that it’s both a lifecycle and business model fit, we also evaluate the following:
- Purpose Fit: Is this capital aligned with the mission of the business, and supportive in achieving the intended impact objectives? Is the capital/ covenant truly responsive to the investee’s business need and impact thesis or is it just serving an industry convention and my own sense of risk comfort?
- Flexibility for the investee: Does it add financial distress to the business or is it aligned with how the business will grow?
Over time, I’ve found that the best partnerships start with a few simple, but intentional, questions. Whether you’re a founder or an investor, these can help surface alignment early and ensure that the structure truly fits the mission:
- What does success look like for the organization and how will this capital aid to move the business closer to that?
- What kind of financing has the business taken in the past and how has that worked/ not worked for them?
- What kinds of flexibility (disbursement, rate, duration, repayment, and more) will be the most useful for the business as they are growing? Can we offer one or two if not all?
- What are the risks inherent in the business – which ones can the business hold and which ones can the capital absorb?
- Where are the structural weak points in the business and will the given structure amplify that?
These questions keep the focus where it belongs: on alignment, understanding, and purpose. They remind us that effective capital design starts with dialogue and right questions.
To read Part 2 – Click here.
Author: Tanya Jain
Senior Investment Analyst at Impact Charitable, where she structures catalytic, flexible capital to advance equitable economic outcomes. She blends technical underwriting expertise with a collaborative, listening-led approach to investing.
