A passionate entrepreneur presenting their impact narrative.
A deep theory of change powering their systems-shifting work.
And always, the perennial question: can impact scale? Or can scale create impact?
These were stories from my days in impact venture capital. Now, as we build stotio to connect strategy with the narratives that drive growth and impact, the story feels like it has come full circle.
This article is about the real narrative of impact investing. It began almost as a quiet revolution that believed that capital could be a force of good, a tool for societal change, not just accumulation.
But aligning profit with purpose is no easy ask. Creating impact in a scalable, sustainable way is hard. And supporting impact, through capital and through ecosystem initiatives, is equally hard. Systems resist transformation, incentives do not always align. The gap between intent and action carries friction, ambiguity and the cost of time.
From Definition to Discipline:
The early roads to impact investment focused on inclusion and access. The intent was to reduce inequity. And the sectors that found earliest expression included microfinance, education, livelihoods, health. Complex, multi-decade change patterns which had no easy one size fits-all solutions.
Then came ESG. Poverty reduction was no longer the core goal there. It broadened into how institutions can take the right calls keeping environmental, social and governances processes in mind. And then entered climate. Energy transition. Inequity reduction still remains a key goal, be it from climate disasters or energy shifts. But each of these layers have deepened what impact could mean. It has also made the term blur a bit more. Is scale the only true way to create impact?
When the Lens Distorts the View
Consider education. The early years of impact investment in this sector were built on deep work in foundational learning, teacher development, and outcome measurement. Investors stayed close to classrooms and to data. They measured progress in children’s ability to read, comprehend, and think. In-depth impact reports assessed and validated every change and it started from the people who needed it the most. But scale was slow, in many cases, difficult even, compounded by pricing pressures and funding shortage at every stage the impact entrepreneurs faced.
Then came the edtech boom. Capital from mainstream venture funds entered, and the focus tilted toward scale and consumer metrics. Edtech was part of consumer tech vertical in most such mainstream investment firms and scale was counted in terms of learner growth the way you would count category sales in ecommerce. Impact was an afterthought at best.
When markets corrected, funding collapsed and with it, according to HolonIQ, global edtech VC investment fell from 20.8 billion dollars in 2021 to 10.6 billion dollars in 2022. The retreat revealed a truth that patient investors already knew that while growth curves can spike, learning curves take time.
Back to Reality and The Real Cost of Enabling Impact
A 2023 study by the Miller Center for Social Entrepreneurship found that impact-first funds operate with 2.5 times higher cost per dollar deployed than traditional funds, roughly 21 cents against 8. The difference lies not in inefficiency but in intent. These funds often build the very markets they invest in, training entrepreneurs, de-risking untested models, and creating the infrastructure others later scale. Miller Center Report, 2023
The price of impact reflects the weight of work that commercial capital rarely bears. Market creation has a cost. Patience has a cost. Both are worth paying.
The Next Chapter: From Intent to Intelligence
The coming decade demands a shift from celebrating good intent to understanding complex systems. Impact creation is structural. It requires redesigning the architecture that drives behavior, policy, and systems change, not just delivery of individual items. To support that kind of change, capital must be catalytic, not extractive, enabling markets to stand on their own. And measurement must move from surface indicators to the depth of outcomes. Returns, too, need a wider lens. Scholars are now discussing impact-adjusted internal rates of return, models that reflect blended value creation over time. (ArXiv Study, 2025)
A Story of Endurance
The future of impact investing belongs to those who understand time differently. Investors who design innovative capital structures that give entrepreneurs both stability and room to scale. Entrepreneurs who pursue ambition with a clear sense of the terrain they are operating in.
And at the heart of it all lies narrative, the connective tissue that aligns diverse stakeholders, ties belief to evidence, and makes patience the engine of meaningful progress.