Insights From Impact-Focused Fund Managers

Thematic investing can serve as a values-based financial pathway for fund managers and investors with an eye on economic and global trends. By tapping into their personal and professional experience, fund managers can build sector knowledge to identify market opportunities that align with stakeholder needs. Investors can also put capital to work on future-oriented thematic solutions to pursue financial returns on both social and environmental impact.

In a conversation at the Sorenson Impact Summit, three trailblazing fund managers shared how they developed concentrated approaches to advancing investment strategies with impact. In their work across a range of sectors — from financial resilience for lower-income Americans to inclusive technology for people with disabilities — they are building frameworks to support sustainable, resilient impact businesses. In the excerpts from their conversation that follow, they highlight the reasons and research behind their impact work and how they connect investors with entrepreneurs in these specific fields.

Meet the speakers:

Ashley Bittner is Managing Partner of Kalos Ventures, an early-stage venture firm focused on finding compelling companies in the workforce, education, and care sectors. Her public policy and education background informs her holistic approach to investing in tech that drives economic mobility.

Regina Kline is the founder and managing partner of Enable Ventures, an early-stage venture firm that invests in companies that help close the disability wealth gap. Her current work builds on her experience as a civil rights lawyer in the Obama Justice Department and a nationally recognized disability rights attorney.

Vikas Raj is the co-founder and managing partner of ResilienceVC, an early-stage venture firm focused on fintech solutions that drive resiliency for underserved communities. His evolving finance career has included roles at a hedge fund, a startup microlending business, and a venture fund focusing on inclusive fintech.

Kristina Rodriguez Maljovec is Director of Manager Research at Sorenson Impact Advisory, a leading investment advisory firm serving individuals, families, and foundations seeking to align their financial assets with what matters most to them, leveraging impact-focused investment opportunities to make a difference in the world while seeking compelling risk-adjusted returns. She served as moderator for the conversation.

This conversation was adapted from a panel at the 2024 Sorenson Impact Summit.

Kristina Rodriguez Maljovec: I’m energized to be with you all today. Thematic investing has been an avenue for many of our clients to express their investment priorities and highest conviction values.

There are an overwhelming number of thematic opportunities for investors to consider to express these values. To start our conversation, I want to know what makes one thematic opportunity different from the next. What types of experiences drive the deepest domain expertise? Why is that a success enabler for thematic investors? Finally, how should investors think about thematic investing with an impact lens?

Can each of you tell us about your areas of focus and how you are working to help transform those sectors?

Ashley Bittner: At Kalos Ventures, we invest in three main sectors: workforce, education, and care. What differentiates our strategy is that we are concentrated in our approach. Our sector and venture expertise allows us to lead and preempt, join boards, and provide sector-specific and stage-specific portfolio services. This three-sector holistic approach is vital in driving economic mobility and changing outcomes for folks.

We also provide post-investment support by bringing in operating partners, venture partners, and coaches to empower founders through the critical moments of early-product market fit to growth. That is a reflection of my work and academic background, as well as my team’s.

Vikas Raj: At ResilienceVC, we invest in and support visionary entrepreneurs using new technologies and business models to build financial resilience for low- to moderate-income Americans. That’s our singular focus. And when I say low- to moderate-income Americans, I’m talking about the vast majority of Americans who live in a state of financial vulnerability, Americans who cannot afford the cost if their car breaks down, or they have a health emergency, or their child gets sick. That’s not a small chunk of Americans. That’s a huge percentage.

We believe that financial services don’t end with inclusion; they end with something more than that. It’s what financial services are meant to do, which is to make your life better and ultimately build resilience. That’s what we invest in. We see a market opportunity to help the 80% of Americans who do not have $2,000 to use in an emergency. We also see a lack of rigorous venture capital support for innovators who are helping solve this problem.

We start at the earliest stages because we think that that’s where the economic and impact alignment happens. That’s where the impact potential gets into the lifeblood. Then, you can build a business that’s responsibly serving lower-income people.

Regina Kline: Enable Ventures is the first impact venture capital firm to invest in closing the disability wealth gap at a market rate. We’re creating a new category in the capital markets: driving equity into the hands of people with disabilities who have been underserved and overlooked for too long by big tech.

There’s a lot of exciting overlap on this panel, as each of us is serving the American workforce that is precariously hanging on, overlooked by technology, and underserved. Our work is helping to identify who will build the technology that is radically inclusive and accessible for those workers and learners.

Enable Ventures is investing with intentionality in a design discipline. We’re investing across manifold diversities of disability, including people who are deaf, blind, or have intellectual developmental disabilities. We have found that there is an enormous marketplace. There are 1.5 billion people with disabilities on Earth today, and that number is growing.

We’re investing in upskilling American workers with disabilities, the next generation of highly accessible and inclusive work-related technology, and the next generation of assistive technologies like captioning, wayfinding for the blind, and brain-computer interface. These solutions are driven by the urgency of the need to put people at the center of technology and uplift their place in the marketplace.

We back founders with disabilities as a category, people who are overlooked by the capital markets — founders, builders, makers, and dreamers who are building educational tech, skills-training tech, and work tech with their own experiences in mind. These are venture scalable businesses hiring inclusively, building inclusive supply chains, and driving value in the capital markets. The exciting thing about this thesis is that it’s horizontal, not vertical. We’re crossing fintech and ed tech and work tech and health tech. The interesting thing about founders and those designing in concert with people with disabilities is that they take design discipline as table stakes for product design. And we know that’s not just puffery; that has economic value.

KRM: What about the value proposition that your expertise offers? Please share a bit about your style and approach to your area of focus.

AB: We take a lead, early, concentrated approach that’s primarily post-product market fit or early product market fit. When you see companies starting to have those early signs and build repeatable sales motions toward the growth stages, a lot of things change quickly for a company.

For example, I led a Series A investment …. when we invested, the company had 17 employees. At the Series B about 18 months later, the company had 125 employees — that’s a very different company with a different role for the founder. That’s why investing in tactical performance and emotional resilience for founders as well as helping them in their next fundraise is essential. It’s crucial, in our view, as lead investors, to make sure that we’re helping to build syndicates for those next rounds that are mission-aligned.

The sector thematic expertise that Regina and Vikas have also allows us to have a conviction to lead. We’ve seen dozens of companies in this space. We have a point of view on what’s different about a sales motion, about a founder, about a market, about the tailwinds. That sector expertise allows us to have that concentrated approach and to take those bets early on in our first fund. That might not be the case for every investment index fund, but that’s a core part of having conviction because of that thematic expertise.

Most funds do not invest in the early stages. Among our peers, few are taking as concentrated bets and larger positions on the first investment.

VR: Our first investment is always at the seed stage. We get very involved with our companies. That level of focus allows us to see the impact most clearly and also drive the returns most clearly. For us, resilience means something very, very specific: It means the ability to generate additional income, increase net worth, or lower risk for the customers that we care about.

It’s clarifying to ask, “Is this a company that is serving the customers we care about? Is it using financial technology innovation to drive the outcome we care about?” It feeds into this virtuous cycle that supports the businesses and everything we do. It helps us build networks around the support of these companies, and it helps us screen and transact more quickly. Ultimately, it helps us do what a big part of our role as impact investors is: swing the spotlight around on an otherwise dark stage and say, “This is a company and an innovation worth paying attention to.” That’s whether you are another entrepreneur, an investor, or a partner. It takes that level of focus and attention to do that.

We don’t invest in companies that say, “Hey, we’re serving the wealthy now. But as soon as we get profitable, we’ll serve lower-income people because we will subsidize.” That doesn’t work for us. It has to be intrinsic in the model that you can make money by serving this customer.

We provide free resilience leadership coaching to all of our companies. We partnered with a group to help our founders be more resilient because we know how hard it is — we’ve done this for long enough.

I hope that in 10 years, we’re not the only seed-stage fintech impact investor because we are a drop in a very big bucket. We’re up against a very, very big problem. We need to scale companies that are up to the scale of that problem. We hope that we’re also a model that will be replicated.

RK: We are a category-defining fund. In many ways, we’re dealing with a market failure because private equity and venture capital didn’t see, hear, or touch the community nearly enough in underwriting opportunities.

Shifting our mindset around how we approach deals is not only a matter of mitigating risk but also optimizing opportunities to build in the community at our table when we are doing institutional underwriting. We need to lead in the capital markets as a voice for the community. We’re not speaking for the community, but the community sure is speaking to us.

We are working daily with a network of disability-led accelerators and folks in the innovation space because we are seeing a confluence of events — this dual demographic trend in the world creating more founders with disabilities.

The connectivity to the community comes not just in sourcing but also in user testing and design: to figure out whether something works prolifically across the different domains in your life. We test through accelerators. We work with the community itself. And we’re acutely aware that more is needed to evaluate whether there is a strong willingness to buy on the part of a B2B payer if you have to talk to the end user. We’re trying to be the first touchpoint and go to market as early as possible to scale up these companies and support how they iterate.

We’re embedding scalable revenue models with impact that will scale in a complementary fashion. It’s a dream for our deals to be able to bake values in as early as possible and then find willing partners who come in in the next round.