Impact investing is a growing movement that seeks measurable social, environmental, and community benefits alongside financial returns. For many in this space, the thrill of supporting entrepreneurs tackling the world’s most pressing challenges is deeply rewarding. Yet the path is not without obstacles — ranging from early-stage risks and the complexity of due diligence to building solid teams and coping with external political “shocks” that can shift markets overnight. One strategy that has repeatedly proven effective is collaboration among investors, philanthropists, and entrepreneurs. The process of impact investing (regardless of how it’s defined or tied to the SDGs) ideally tracks the triple-bottom-line return that investors seek.

Impact investing goes by many names and descriptions, but we can adopt a broad, “big-tent” approach to defining it. By “Direct Impact Investing,” we refer to supporting early-stage ventures with strong potential for high impact, as opposed to investing in a fund or other indirect mechanism. Organizations like Investors Circle (IC) — with more than 30 years of history — have demonstrated how angels and other investors can work together to support promising impact companies, most often through equity investments. The ideal is that these investments also embrace positive impact, meaning they’re fair to all parties, supportive, and rooted in partnership rather than hierarchical or extractive models.

IC has already helped move more than $250 million into companies devoted to a “triple bottom line.” As a membership-based nonprofit, it coordinates collective action to support entrepreneurs leading companies with exceptional potential to benefit both people and the planet, while delivering financial returns and fostering a community where profit meets purpose. Early-stage impact investing, as it turns out, is not an individual sport. Investing groups offer a platform for accredited and other investors to collaborate. As the Jack Johnson song says, “We are better together.”

The team at Navajo Power; Courtesy of Navajo Power

A standout example of this collective power is Navajo Power, a clean energy company that develops utility-scale infrastructure on the Navajo Nation and throughout Indian Country. The Candide Group played a key role as lead impact investor by setting non-extractive, long-horizon loan terms — providing a “tentpole” that others could rally around. “Through the work of our small angel network [IC], we brought together philanthropists, foundations (including Tides, Sierra Club, Impact Charitable, and RSF), and individuals who were delighted to be part of this important project,” explains IC Board Member Babbie Jacobs. Over time, IC members learned about the company as a group and then collectively wrote checks.

Whether you’re a seasoned impact investor or just exploring impact investing, consider joining an investor organization or network.

From there, philanthropists and investors spread the word, as did IC itself. To date, multiple rounds have closed, raising more than $5 million. This influx of capital drew dozens of investors, boosted the company’s nationwide recognition, and furthered market opportunities for its products and services.

The Magic of Collaboration Between Investors and Entrepreneurs

The proverb “It takes a village to raise a child” aptly describes the collaborative nature of direct impact investing. When investor stakeholders pool their resources, expertise, and networks, the result can exceed the sum of its parts: 1 + 1 = 3.

Entrepreneurship is hard — most start-up companies fail. Statistically, that is simply true. For impact entrepreneurs, the hurdles can be even higher. Think of the analogy to Ginger Rogers, who did everything Fred Astaire did — but backwards and in high heels. Early-stage ventures frequently grapple with limited resources, operational challenges, and the personal toll on founders who must juggle professional and personal responsibilities.

Impact investors are at their best when they acknowledge these realities and approach entrepreneurs with empathy. Rather than seeing themselves as sitting on “the other side of the table,” socially responsible investors seek mutually beneficial partnerships. The focus begins with “What can we do?” rather than “What do we get?”

With Navajo Power, for instance, investors, foundations, and other stakeholders collaborated to de-risk the project and supply resources that spurred growth — benefiting the Navajo Nation and the wider energy transition. While having many entities at the cap table can feel crowded, it also brings strength and resilience. Investors tapped various capital sources, from direct equity to foundation program-related investments (PRIs) and donor-advised funds (DAFs). As Jacobs notes, “In this current climate, it’s a pleasure to match investment with tax-deductible contributions on appreciated assets via investments to organizations that support transformative entrepreneurs and their changemaking companies… It’s gratifying for us smaller check writers to be part of solutions alongside large organizations and foundations.” Acting collectively spreads risk and amplifies the resources available to entrepreneurs, creating a win–win–win–win scenario for investors, companies, customers, and communities.

Direct impact investors also have the chance to offer more than money. By providing mentorship, serving on boards, and leveraging personal networks — what some call Time, Treasure, and Talent — angels supply non-cash support that can be critical to a company’s success. Working through a network like Investors Circle, a single company can tap into a wide range of expertise and connections for funding, hiring, marketing, and more.

The Power of Collaboration Among Investors in Due Diligence

Another critical advantage of collaboration in direct impact investing lies in the due diligence process. Evaluating an early-stage opportunity requires a multifaceted skill set: industry know-how, financial acumen, and a knack for marketing and operations. Few individuals possess all of these attributes. When investors join forces, they pool their expertise, insights, and resources for more thorough and efficient evaluations.

Navajo Power benefited from precisely this approach. Multiple parties contributed to understanding the project’s potential in the renewable energy market and its service to Indian Country. This collaborative due diligence strengthened the project’s overall viability, built trust and camaraderie among stakeholders, and ultimately led to more checks being written. Newcomers to impact investing learned from seasoned veterans, while experienced investors gained fresh perspectives. By joining forces, investors built a community of practice driving meaningful change — and brought more people into the fold.

Conclusion

Direct impact investing is both challenging and deeply rewarding. Collaboration proves invaluable for all parties, especially in angel and early-stage investing. When angel networks, foundations, and direct partnerships work together, the ventures they support become more than the sum of their parts.

Whether you’re a seasoned impact investor or just exploring impact investing, consider joining an investor organization or network. Although investing is often viewed as a private or even secretive activity, linking with others can provide significant benefits—both for your portfolio and for people, communities, and the planet. Your involvement can make a tangible difference by bringing hope and positive change to our world. Together, we can transform bold visions into lasting change. Now more than ever, that is precisely what is needed.