A long-time impact Angel Investor recently told us that he thought firms like ID and First Light Ventures are helping professionalize the field of seed-stage impact investing. His comment was based on the more systematic diligence and portfolio management that comes with paid investment management. In his experience, the only people funding high impact start-ups where individuals that lack the time, focus, and (let’s face it) personal motivation to make sure each investment has real potential.

That got us thinking. Initially, it scared us because we don’t like the idea of over-professionalizing the field. As soon as protocol trumps practical we are looking for the fire escape (we saw that happen in the microfinance industry where professional investors forgot that “the map is not the territory”[1]).  Thinking about it a bit more we realized that there are positive aspects of professionalization, like academic recognition.

There is probably no better indicator of the rise of impact investing than the explosion we have seen in social entrepreneurship related programs at business schools. A few social enterprise programs like the Social Enterprise Initiative at Harvard Business School have been around for well over a decade. Today it’s virtually mandatory for top-tier business schools to have a social entrepreneurship program. An MBA admissions researcher was recently quoted: “It used to be that a business school’s social entrepreneurship program was just an office, but now it’s often a whole department.”

In Boston we are lucky to not only have Harvard’s SEI, but also the Legatum Center at MIT, and the 400+ students involved with Northeastern’s Social Enterprise Institute. That’s where professionalization really begins.

In our years involved with impact investing (and microfinance before that), we have seen a lot of reformed bankers trying to make nice. There is a need for that, but reformed bankers will never really create a new field. They will never forget what they learned and will approach impact investing as an empty canvas, free from the business methods that have dominated Western society for over 100 years.

Luckily, there is a rapidly growing crop of young minds that don’t suffer from our bias. They are clean slates, educated in impact maximization, not profit maximization, and in social benefit, not individual gain. It’s not the first time that we have seen the youth embrace and eventually lead a revolution, but it might be the first time we have seen them do it leveraging capitalism and wealth.