 I am delighted to briefly introduce myself, Lisa Richter, co-founder of Avivar Capital and our wonderful panelists who are going to tell us more about their experience. So I'll just briefly say we have Lalita Nunn, who is director of investor relations and program at Potlicker Fund. We have Jamie Nichols, who's a director at Avivar Capital and he's specifically involved with Impact and other portfolio management, and Jessica Hales-Wilton, who leads the Education Innovation Ventures at ECMC Foundation. Wonderful. So with that, we're going to dig in and we're going to ask each of our panelists to say a word about how they come to the practice of impact investing and then why portfolio management, including impact and financial reporting, are important within their organization. So Jesse, maybe I'll start with you if you don't mind. I just want to say it's so nice to see so many of you here, including some of our portfolio companies in the audience. So thank you so much for joining us today. So as Lisa said, I run a program called Education Innovation Ventures, which is the Venture Arm Impact Fund of ECMC Foundation. We are a national post-secondary education funder and we're focused in closing equity gaps for students from underserved backgrounds in post-secondary education. The fund itself makes early stage investments, so pre-seed, seed stage investments, sometimes debt as well, in both for-profit companies that are very mission aligned, as well as nonprofit organizations that have some sort of earned income stream. And we really started our impact measurement journey at the very beginning of building this fund. I come from an impact measurement background and felt from the earliest days that it was really important to define what we wanted to measure at the onset of building this fund. And I guess in about two years ago, we had the pleasure of partnering with Avivar Capital as thought partners to really help us think through how to really refine the type of metrics that we're measuring and build a really robust, I guess, impact measurement system and tool for our portfolio companies. You know, Jimmy, I think I'll hop over to Loli to all right and then come back. Thanks, Lisa. Hello, everyone. Loli Tanan, the director of investor relations at Potlicker Capital. And just to a little background, I come into this work from two different areas, first working in the financial sector for 14 years and then in the nonprofit sector. So this space of impact investing is really that culmination of my career journey. And in this space, I like what I like to say is reimagining how capital flows to support our most disinvested in communities. At Potlicker Capital, we are a national fund. We're a charitable loan fund. And we really focus on that intersection of not only racial justice climate, but also social justice, where we provide resources to black, indigenous, Latino, and all farmers of color. So we're in that ag space. And we're just not your traditional charitable loan fund. What we want to do is provide reparative capital. And our way of looking at reparative capital is acknowledging the past harms and systemic issues, historical discrimination that still plagues many farmers of colors today. And we acknowledge that that should not be the burden of the farmer. And so we deploy flexible, catalytic capital resources, wraparound services in a holistic manner to really build the resilience of farmers of color in America, rural America, and urban America today. And so we really look at this as movement building work and modeling a way to really work alongside farmers of color in a new way. This is not transactional. It's relationship in nature. And when we show up to a farmer, especially a farmer of color, you have to show up differently. You have to have some build trust in a different manner. You have to be willing to come from outside of the office, from the ivory tower, put on some boots, and actually understand the seasonality and the cycle of the farmer in order to provide the best solutions possible. Thanks, Lelita. Jamie. Thanks, everyone. Jamie Nichols here. I'm a director at Avivar Capital. And in my role at Avivar Capital, we support a variety of different type of investors, all of them mission focused and mostly focused on private markets to analyze the ongoing financial impact performance of portfolios. So that's kind of across different asset classes that could be debt, that could be direct equity funds and so on. What brought me to this work is I had a lot of experience previously actually on the reporting side. So I was managing a food bank where we had to collect information from 100,000 plus beneficiaries and I think came into this work understanding the tension between logistically capturing information where sometimes it's frankly a burden to the underlying beneficiaries, the underlying recipients, and also the real need to capture and showcase meaningful impact data that helps steer decision making, refiner strategies, and so on. Thanks, Jamie. And thanks all. If I could, I'd like to ask each of the panelists when you think about meaningful impact, which was a concept lifted up in the session description, what are meaningful impact measures for you? And I'm particularly interested in this because I understand, Jesse, that you're driving innovation using venture capital and Lelita, you're really trying to redefine relationships using debt and grants. So, Jesse? Yeah, and I love the way that you just phrased that because I really do think that meaningful impact metrics have to be meaningful to you. I think you have to measure what matters to you and to your beneficiaries and stakeholders. And so it should look different. It will look different with different investors for different portfolio companies. And I think that that's, I think that that's right. Like I think that you can build a system which in our case, we have both fund level metrics as well as company specific metrics. And I think that that's really intentional. It's intended to sort of to send this message that we understand as a foundation, we have stakeholders that we need to deliver important impact information in data and outcomes metrics too. And those types of things that are really important to us are around, for example, persistence for college students, transfer, completion, and access to family sustaining wage careers. And those are things that we do ask our portfolio companies if available to track alongside us so that we can aggregate those across the fund, across our portfolio and really tell a shared story of the type of impact that we're hoping to make through our investments. But we also recognize that at the portfolio company level, each company is going to have specific and individual metrics that are really important to them and for them to tell their story, most effectively, and to really kind of unlock either additional capital in the future, right? Like make sure that companies have the type of information and data systems in place to be able to tell their story to future investors. And also to use that to really inform their customer base to really share kind of efficacy and data around what they're doing so that people are bought in and are more willing to either buy those products or platforms or services. So I think it really happens on two levels and I think the most important piece is that we're really thinking about what is important to our stakeholders, whether it's our board, our internal learning to the field, and to the portfolio company and their needs. Thanks so much. Lolita. Yeah. The impact measuring, I agree, Jessica. There is different pathways and we're accountable to our investors as well. Potlicker uses program-related investments, grants, and re-coverable grants that come from a married of different ways. And when I look at that impact piece, many times I've just got to throw this out here. Many times I wonder what happens to that information when it's shared. So we have investors or funders who send this list, how many acres, how many watermelons, what are the widget counts, and what happens to that information. And so when we provide that back to the investor in the foundation, there's no follow-on conversations that happen. So it often leaves me wondering, did it just get a checkbox checked and filed away? And so at Potlicker, what we want to do is really measure the resilience of the communities that we work alongside. And BIPOC farmers have been historically disinvested in and so there's a trust issue that's often needed to be overcome. And as we're building these relationships, we're gathering lots of information. We want to measure the impact of our relationship with that farmer at day one. Are they connected to the community? Are they in relationship with others? Are they connected with distribution? Or do they have crop insurance? And when we look at the relationship that we have with them day one and then in the next year, how that's grown, year three grown even further, and counting that as a way to measure how impactful that farmer is not only in the community that they serve, their individual farm has been able to scale, has been able to connect to distribution, and then also we want to use their voice to inform policy. So building the resiliency and measuring that resiliency piece for our organization is what's really important and it's something new in its novel and it's going to change. I think I want to say I hope it changes the way that many people look at just measuring the widgets and its actually growth and its trajectory that's actually making a big impact in the community. Thanks so much. Jamie, your perspective is perhaps unique because you're so focused on coordinating financial monitoring and impact monitoring in a unified report. So as you think about what's meaningful in that exercise, what comes to mind? Yes, well starting with the on the impact side, I think that the most meaningful impact data you're collecting is something that the investee could hold up to a potential funder or a potential client. It helps give them traction. So I think sometimes we're in this practice of counting the widgets, kind of having maybe a focus on scale metrics, you know, lives touch, beneficiaries serve that when viewed in a vacuum it's like, okay, is that good? It's really important that whatever you're collecting, let's say it's an ed tech company, they could go to a potential client and say, well look at how we're improving completion rates, we're improving persistence, it's not just a one-way, you know, value chain essentially. More to say, the other thing is I also think there's value in marketing materials. So how do you balance those two things? Because frankly people do need to court funders with some quote unquote vanity metrics. That's a real dynamic. But I don't think that dynamic, the burden of that fulfilling that need should necessarily fall on investees. Financially, you know, what we see is there are a lot of different type of investees and what we would look for financially varies, whether it's an early stage company, a fund, a CDFI for example. But the one thing that is important is if they can't deliver on financial objectives, they can't deliver on the impact a lot of the time. So sometimes there is this, there's this movement to just kind of be impact only or focus on the impact metrics where the financial metrics can be really important because they can help you support and investee at a time where they might be in a troubled position so they can ultimately deliver on those impact objectives. Those two are intricately bound. And the actual underlying metrics that drive that, you know, we could take this into a side conversation. There's a lot and I think that some of those come from financial statements, some of those are more sort of KPIs that speak to volumes, stickiness of customers and ultimately reinforce a lot of the impact metrics that we see and collect. Great. I just want to open it up for a minute in case anyone in the audience would like to either offer a meaningful impact measurement from your organization or say a word about how having quality portfolio monitoring and financial or impact has helped the organization. We'll plow ahead, but I just want to be sure you have a chance to leap in if you want to. Okay. Great. We are going to go on to talk about what are the qualities of a successful portfolio management program? What are the elements? And Jamie, on this one, I might start with you because you've really been forced to give a lot of thought to that. Yeah, I'll try to be concise. I guess that's the hard part. I think one is that it starts from diligence. So when you have an investment thesis and impact thesis during a diligence, you're very transparent about what that is with a potential investee and that you kind of allow the potential investee, the potential partner, to say, well, I think that I'm a good fit because we do this and this is how we measured this. So there's full transparency from the onset of the relationship, how you're compatible, how it meets that mission and impact thesis. So then during diligence to closing, post-closing, there's no surprise as to what your motivations are or expectations are as an investor. Sometimes there's a very well-intended push maybe to kind of reverse engineer metrics, which I think sometimes you can do kind of elegantly, but making sure that you kind of start during the diligence process, introducing expectations and expected metrics, and that's a conversation. And its bottom-up, I think, is really important. This is going to sound almost like trike, but tech-enabled, you know, if an investee is expected to report certain things or you'd like them to report certain things, it should be as easy as possible for them to do it. They should know exactly what they're supposed to report. There shouldn't be this kind of guessing game and a lot of that convenience, frankly, I think is addressed by technology. I think another really important element of that is what I just kind of mentioned before hinted at is that it's dynamic and it's kind of informed by the investee. So rightfully, problems change, you know, strategies change. So if a certain company, a certain fund, makes a pivot, wants to do something else, that should be okay and your framework should be modular enough that it can capture that. So you're not kind of hamstrung into this, you know, reporting framework that's not relevant either to you or to the investee. So I think having that flexibility is really important and like six billion other things, but I'm going to stop. Maybe I'll just pop one question to you before we pass it on. I know that sometimes you've been faced with portfolios that have hundreds of social metrics attached to them. Any guidance on, you know, how investors or investees might think about streamlining their approach to the social metrics? Yeah, and I wonder how this resonates with people in the crowd. Less is the main thing. I think sometimes people can confuse the volume of impact metrics for the magnitude of impact. So they say I'm going to have 30 impact metrics and all these different KPIs. Not only are you, it's going to be really difficult to arrive at a so what with that level of volume, but it's a huge burden on the investee. A lot of times that's not their core competency. They should be focusing on their products and services, which is not reporting or gathering some of those metrics. So I think it's really important to come to, I hesitate to have an actual number, but we'll say less than 10 real meaningful KPIs that are meaningful to you and to the underlying investee. Because it's, you know, beyond that, I really, I'd like to hear maybe from folks in the audience or other organizations how they actually make use of that data because it can be really challenging. And if I could throw out a question to the audience, how many of you, if you're either running a portfolio and reporting to investors, or if you are an investor with a portfolio, how many of you think about the selection of your metrics in such a way that you can roll them up and see your impact across the portfolio? Great. It's impossible. It can be very challenging. It absolutely can be challenging, but you know, even if there were a subset of the metrics that could be rolled up to kind of watch what a portfolio is doing, we think that can be helpful. Yes. And how would you define efficacy then? That's the unfortunate thing about biomass, is there's the proliferation of these. And it could be SRI score, or it could be return, other kinds of returns. Yep. Commercials, so defensively, commercial, concessional, you know, what we also support outcomes funders, and it really boils essentially down to things like that that can be generalized and globalized. And to some extent, it seems that it would have to do with delivering on what the expectation was of the investment originally and or as the strategy may need to change over time. That's very helpful. Thank you. Jesse, how do you think about the elements of a successful portfolio management system? Thank you. I was really going to jump in and maybe take a step back for a second and say, I know I'm up here on the stage, but I am super aware of the fact that we've spent so much time thinking about our impact measurement process, and yet we still have a really long way to go. And so a lot of the things that Jamie said really resonated with me, and we started with a laundry list of metrics in the beginning, and we have been calling and cutting them down, and we still have more to do. So I think that this is all happening in real time, and I just want to be, I just want to be really transparent about that. Like this is really hard. We're fortunate that we're in kind of a narrow, a more narrow industry, where some of the metrics and outcomes that are most important to us can roll up, and we can maybe talk about impact happening across the fund, and we recognize that that's not maybe the position that a lot of other funds are in. But I will just say it's been iterative. Like we've started in one place. We've evolved multiple times. We will continue to. I think it's just, we have, you know, we recently, as of this year, started developing, started utilizing, or leveraging, I would say, a new framework. And it's not new, it's new to us, the IMP, the impact management project framework. So we've really been thinking about how do we start at the earliest, earliest stages, really having these conversations in partnership with prospective portfolio companies and investees to really understand what matters to them, what they think is feasible to measure and to track. And we do ask for targets. They're not meant to be punitive, and they never are, but just to kind of get a sense of where somebody is trying to go and recognizing to your point that things will change over time. And we have to be flexible. And we are very comfortable being in that position, but it helps to create a bit of a roadmap. And so as we get feedback, we do try to incorporate it. We do make changes, you know, as we go, we really are looking to decrease the burden, I think that that investees feel both at the time they're developing initial metrics and throughout the process of reporting on them. In fact, Jamie and I have spent a lot of time talking about how much we would love to just change the word monitoring. That just doesn't seem to be really in the spirit of what we're trying to do. And really it sounds, again, like punitive, it sounds very big brotherly. Like we are really thinking about this as partnership. And we want to be, you know, to the extent that we can be in the trenches. Like we want to be there with our portfolio companies. We want to help. We are not there to just, you know, hey, send us a report once a year and, you know, we'll do with it something maybe, or it goes on a shelf. Like I totally agree, Lolita. That is not the essence of what this is about. And it's not perfect. Like it's just, it's a constant journey, I think, for us. So I know that didn't fully answer your question, but I think it's worth saying. That's moving us forward. But before I hop to Lolita, I'm just thinking about the fact that you're investing in venture-backed companies. Are you documenting reporting requirements in a side letter, or how is that documented as you enter into the investment? Oh, great question. So like Lolita, we use program-related investments. So I'm not sure how many people here are familiar with this tool. It's like a wonky IRS designated tool for a form of impact investing. And as part of that, we do document every investment in a side letter. Sometimes it's embedded into a loan. But we do, for our venture-backed investments, we do have a side letter where we are very, we clearly articulate sort of the reason behind why we're making the investment. So stating the charitable impact. We have even, we have some other kind of languages around reporting. So a lot of the financial reporting that is quarterly. And then we detail what our annual impact requirements look like. So everything is there. It's very transparent. And then we ask the investing to work with us. Like what does this resonate? Does this make sense? Does it seem feasible? One of the things we haven't discussed is that we do ask for data to be disaggregated by race and ethnicity, gender, parent status, Pell eligibility. We are trying to understand to what extent these innovations and companies that we're supporting are closing equity gaps, or are helping kind of move the needle on closing equity gaps. And we understand that that's not maybe feasible for everyone, but we do think that sometimes having some of that outlined can be aspirational too. So maybe an early-stage company, some of this is not realistic in year one. That's okay, maybe not in year two, but maybe it is something to aspire to in the future. And I think that's also where a national foundation or an impact investor can play a role in having that conversation and thinking about, if we're not there today, maybe how do we get there? Thank you so much. Lolita. Yeah, I like this question because I'm on the receiving end where we are accountable to reporting to our investors and grantors. And I appreciate that being in conversation and also being flexible is very important when it comes to reporting on the metrics and co-designing. So in the early stages, like you said, Jamie, where you're receiving a term sheet or you're sharing the information of what metrics are going to be needed down the line, there's that opportunity for the investee to come back and say, this looks a little extractionist in nature. How do we work together to make this a little bit more relatable or something that we can adhere to? And it's all in the relationship. It's being transparent. Many times a grantor or a grantee or an investee takes it and they don't feel empowered to actually go back to the investor or a grantor to say, hey, we're not able to do this. But if you lay that out in the beginning, like that we are here to support you in the work that you are doing and we want to set you up for success, having those transparent conversations and having that door open to where the person can come back and say, can we have a conversation about this because this is not going to work. And you being willing to say, I understand. And yes, we can have that flexibility to make this work. I love that comment because there's a fair amount of research in the field, the lean research work that's being done now out of 60 decibels and came out of Acumen Fund that talks about how investee organizations are accountable to their communities and using survey tools and so on to make sure that the end user or end beneficiary of the program is really benefiting. The reason I bring it up is, when you say to an investor, this is not comfortable for us, you're not saying I'm not willing to be accountable. I think because your performance driven for sure, but you're saying these metrics may not be the ones that are most important for us. And having the flexibility, it's not boilerplate. These aren't loan documents. You can ebb and flow. You can make some changes to meet the needs of the very folks that you're working with. Great. Thanks so much. Jamie, I'm going to go back to you before we leave this question, just because I know that you monitor investments that are both market rate, quote unquote, and below market rate. And do you notice any qualitative differences in those different venues? Well, one thing that comes to mind is a lot of the below market rate investments, there might be concessions because they're so impact for. They could be a nonprofit. So that muscle for impact reporting is usually already built out. So the classic example, it could be like a community development financial institution or another nonprofit. They are usually in the business already of collecting and reporting on impact. Whereas a lot of the more market rate investments might have a lot of great KPIs and reporting, but it's probably tilted more towards financial metrics. So it can be more of one thing I'd like to just highlight, and I think it came out at ECMC Foundation's work, is in some instances, this could be an early stage startup that says we don't have this impact data that we haven't collected before and through a conversation you arrive at some impact metrics you report on. In one instance, they didn't have that muscle. It was a kind of a market rate investment and helped develop a template, helped develop metrics. Through another investor we work with who was asking for impact metrics, a few years later we saw the template that ECMC essentially developed. So it just goes to show that even though there might not be that muscle or capacity for the market rate investments, I think that if you kind of collaboratively work with them to help devise and sort of formalize some impact metrics, they can then use that to court money and to satisfy the demands of other funders. They just might not be as experienced in working with impact investors and just need some guidance. And that has happened more than once where we saw a very early stage company didn't have impact reporting, kind of developed a process, and then a few years later that same process developed to fill sort of the reporting requirements of a number of investors. Yeah, great point. Did you want to leap in on that at all? Okay, well, I mean I'll just mention that I'm sure many of us in the room have seen the increasing use of diversity equity and inclusion surveys of investee organizations and asset managers across the return spectrum. And it's my impression that that is starting to change how the asset managers, particularly on the market rate side, are thinking about their hiring and their decision-making process. It's still way early days, but I think folks are beginning to realize they can't fail to consider the issues of equity and how they're running their programs and their funds. Lisa, I'll just add to that. And this actually happens a lot on the grant side of our house, but we do include that type of questionnaire and we do use it as an opportunity to have a follow-up conversation. So if a company is not maybe, you know, there's an opportunity to sort of be more diverse or inclusive and we sort of see that through the questionnaire. We can have that conversation and ask what are the plans for the company? What are you thinking around hiring? Again, it's not meant to say like, hey, you're good or bad or there's no like judgment necessarily. It's just more about opening a door for our conversation and to kind of understand a company's intentions as they grow. Yeah, and really just making sure that they're aware that this is an evolving norm in the field and really you can't fail to take this into account. Let's take a minute to talk about where the field needs to go in terms of portfolio management, both financial and impact. And I'd open it up to any of the panelists on changes that you might like to see. I have a burning one, so I'll just jump in quickly because I do see one of my colleagues here in the audience and one of the things that we've been working on, those of us in the education space or a couple of us I should say in the education space is recognizing that we're all asking for relatively similar metrics at the fund level and thinking about how we might be able to come together and create some sort of standardization around those metrics so that we're not asking each of our investees to report differently on persistence, like are you semester to semester persistence versus annual persistence first and the cadence of reporting. So some of us are asking for annual reporting. I think that's becoming fairly standard in the industry but some of us are still asking for quarterly impact reporting and so we're trying to find at least both around cadence and like the logistics of actually collecting a report we're trying to kind of come together so that we're not being like overly burdensome on shared investees but then we're also thinking about the content of what we're what we're capturing what we're asking people to report on on an annual basis and can we come to consensus across there as well because it is you know I think that I think reporting can be a real benefit to some extent for a lot of the reasons that Jamie spoke about but if you're being asked for 12 different sets of metrics from 12 different investors it's not going to feel that way it's going to feel incredibly burdensome and so this has not been an easy effort but I think it's been a really important one it's been ongoing it will continue to be we're constantly kind of open to feedback about that as well but we're really striving to build a shared measurement approach because we really think that's important for the field how many folks out in the audience are involved in any effort of that sort that's great I think many of us feel that this is absolutely essential in the field at this point yeah I agree and you know when we go through due diligence with the investor and there's the opportunity to share due diligence across different organizations I would appreciate having the same opportunities for reporting metrics put it in a cloud go there and pull out the information and you know I also want to understand what the goal of the reporting in metrics is going to accomplish so there's a two-way street where we're giving you this information you're requiring this information what are the goals what are we accomplishing and if that needle is not moving what's going to happen what do we need to do to ensure that that needle is moving instead of just counting and reporting and nothing is changing yeah super helpful I'm about to go to questions but I would welcome thoughts from the audience how would you like to see the field of portfolio management change either on the financial side or the impact side I mean I was thinking about the fact that it used to be pretty standard that an investor would have a site visit with an investee once a year and you know for a variety of reasons I think that that has become less the norm but certainly in that kind of meeting there was always the chance to talk in more conceptual terms how are things going and to think about whether the needle is moving yeah absolutely I mean you know potlicker we're in this unique space we work with accredited and non-accredited investors we take in PRRI's grants recoverable grants we redeploy this to farmers of color and we are in relationship with the community that we serve we go to site visits we are willing to get out there I live in Michigan I go visit farmer Melvin I carry my boots in my car because I know I'm walking the land with farmer Melvin and so these are the things that we are invested in the success of the folks that we we work alongside and that's the same type of mentality that needs to happen the other way become invested there are some great organizations out there that do this 11th hour and Schmidt Foundation and Katali there are some great folks who work alongside the folks that they're supporting want to understand the work that they're doing and then there's the follow-on so when we're working with a farmer year one we're they're the first people that we're the first people they talk to and call when something is happening in the organization we're going to be there to help de-risk whatever is going to happen we do not want to write off a loan so we're going to be able to come in bring other folks off the sideline restructure debt and make them a success continue to help them be successful continue to help connect them to distribution continue to help them build a community of practice that's what it's going to take from all all sides of this work it's a great point and I think that comes back to your point Jesse about let's move away from the concept of monitoring to perhaps partnering or whatever the term might be great well let me take a look at some of the questions here and I do appreciate that they seem to be pretty legible for Jessica what is your check size for the investments that you do and what is an impact side letter for and then how do you line up size of investment with realistic expectations about tracking impact okay so if it's okay maybe find me after and we can talk about check size I appreciate it but maybe in this forum I'll I'll I'll talk a little bit about the side letter so the reason for the side letter is that as a program related investment there are three things that we sort of have to abide by they're really kind of nebulous but they come down to the first thing is that we cannot make our investment strictly for the appreciation of income so we're not looking to really profit from the investment it doesn't mean we can't but it's not the driver it's not the reason we make the investment the reason we make the investment is the charitable purpose so that is that that is written into the side letter it's almost maybe stating the obvious but it is important that it is in writing we sometimes have a redemption clause in our side letter to say if you really deviate from this thing that you know we are discussing and the sort of this trust that we've been building around this is this is sort of what the investment proceeds are for and this is sort of the the purpose of the investment we would have a conversation about whether it makes sense for us to continue to remain invested in the company so that's we really lead with impact and that's really because this is sort of again that IRS designated tool the other purpose of the side letter is to be really clear about reporting requirements right so we really want to be upfront and transparent about what the expectations are around reporting quarterly financial reporting and annual impact reporting it's not it's not a one-way conversation typically people don't have side letters so we draft it and we have some like sort of a template a starting point but we really look to this to be again iterative and something that's done in partnership what was the other part of the question because there were like a couple of components yeah there were a couple it was the the ones that will be in a side conversation and how do you correlate the size of the investment with the impact of reporting expectations side in other words for a small investment does that mean a lesser reporting burden you know this is a great question and I we think about this actually around due diligence like how do we right size the check to the amount of due diligence we're doing this is a conversation we have had extensively with Avivar too and it's it's it's actually quite complicated sometimes because from our vantage point we feel you know a smaller check size in a really early stage company where there aren't a lot of metrics to track like there isn't a long track record or traction really we feel maybe to some extent maybe should require like less due diligence and there are other parties that feel that sometimes earlier stage companies require more due diligence so I don't think the field has really like come to agreement in terms of what how to right size checks with due diligence and with impact reporting I certainly think financially there are just fewer metrics for an earlier stage company the track record again is not there you don't have the same KPIs but you can start to build together you can start to say at some point in the future what would this look like and how do we get there with impact it's the same we typically have impact metrics that we like we discuss and we recognize that not all early stage companies are going to start reporting on those immediately especially with a disaggregation of data that can be really hard for some companies that are working with universities and colleges for example where they need data sharing agreements in place and we recognize that we don't expect things out the gate or ever if that's really not going to be realistic but I do think it's it behooves us all to have a conversation and to explain why those things are important to us and then think about how we might be able to get there together and make sure that that's also a priority for the company so I don't think it's about forcing any metrics on a company that doesn't inherently want to be doing that work and tracking that that those metrics themselves great point and great point that we don't yet have agreement on size and how that correlates to the intensity of the diligence and the reporting all right it's possible for impact to be negative how do we encourage funds to report where the portfolio is not doing well and I think that means maybe bringing about unintended consequences not just failing to perform to financial expectations how do I convince my fund to report the whole spectrum of impact to LPs you ask you have a conversation you have to have build that trust so they're willing to even share the good the bad the ugly and be willing to pivot and help them transition it's the same with when we're working with our portfolio of farmers and they're having some issues they're not able to purchase supplies to keep the business going we want to be there when they're having these issues so we can help them pivot so we can help restructure that debt it's kind of that same lens you need to look through and those ongoing conversations and having the door open to say we're here for when things are not going so well so that we can tap into our spheres of influence and maybe bring others in to bring provide solutions that work yeah you know it's it's funny because with something like this I feel like especially with funds they will be more willing to report being out of line with financial expectations and lag or it's financially but impact that's almost like a no fly zone and it's weird it's like why why will we say well mark and do this company hasn't progressed they didn't meet their their benchmarks but you don't usually see that same narrative with impact reporting it's like any bad news is horrible news or not even bad news that's not in line with expectations and I think especially with you know and if you're investing early stage companies you're investing in an idea and ideas don't always work and that's okay that's what like guides that's how you refine a strategy that's how you would you know improve outcomes it's you know that just especially venture capital that's that is what you're doing is you're taking huge risk and trying to find a few successes that a lot of times will compensate for ones that don't work out and I think it's that same dynamic is it play on an impact front and that's okay you know it's just I realize in our work we ingest reporting from like 200 200 plus entities and we see on you know fund statements a lot of narrative about market conditions adversely impacting you know financial targets of companies but I guess to the question we rarely see anything about impacts not performing in line with expectations and I think that that's those that's the good stuff almost that and that's oh that's okay and I don't it's a great question because I don't know the way to change that narrative but one thing that does come to mind and I know this is kind of veering off course a little bit is to the point earlier I think you can have impact reporting that is to guide decision-making refiner strategy and then also like marketing and I think that so many people look at impact reporting as marketing that they don't want bad marketing and they're conflating those two things so the more that we think about it as like well one is to guide decision-making everybody needs to market their company their business and that's okay but that shouldn't be the driving force behind the metrics you're collecting counting widgets counting live start all that stuff that you know the vanity metrics so I think it's understanding that those are two separate buckets and the less you kind of confuse them the more you can report on the bad stuff because people have the right expectations Super interesting Jesse did you want to add at all I think that's okay maybe one thing is just we do we do a sort of impact risk assessment at the beginning at the initial during the due diligence phase and impact risk assessment so what we are and Jamie has been really instrumental in having us think this through but like we are looking or we are considering what could go wrong from an impact perspective or what what might deviate or be like of course from an impact perspective and so it is part of the calculus like it is something that we take into account and then I think going in maybe eyes wide open or more aware of things also helps us again have those conversations and check in and maybe try to make sure or try to work together to kind of ensure that those those like we remain aligned around impact I think there is a difference between like negative impact and just maybe not having the intended impact like at the rate maybe of the intention intended impact so I think those are also like two different conversations is something adverse happening right for example in our case to students like are they taking on too much debt that they can't repay from a program that was meant to help them you know like decreased debt load like that that's a different negative impact then we thought we were going to reach 50 students but this year we reach 10 like those are two different stories yeah this I mean this is a super interesting question and may I'll maybe say a couple of things number one I would just suggest people might want to go over to the the FB Herron Foundation website where they're organizing approaches on net impact the net contribution I think is the way they they frame it just the understanding that any investment could have either a positive impact or a negative impact and they're trying to get net positive impact and they've done a lot of thinking about it so it's it's quite provocative the other piece is that you know unfortunately we are in the era now where many of our early prayers that impact investing would be mainstreamed are being answered and along with that there is in fact marketing hype and so I think it's incumbent upon all of us in the field to be alert to that risk and even while we for sure want to see better marketing and storytelling and one thing we haven't talked about that much today but what I think is important to many of us in the room is how do we take the quantitative data and turn it into compelling stories that really change the narrative about the kinds of communities the people in the places that we're investing in but but that has to be accompanied by the transparency Jamie that I think you're talking about that not everything works and we're still learning by doing and if we don't have that trust we really can't continue to move the field in in the right direction super super interesting question and lots to think about there let me come to our last question what can or should funders do to validate and edit the link between their investees theory of change and the metrics they're actually collecting what do you do when these don't align I don't know if you may have seen that Jesse or you kind of talked about lowly to sometimes attention between what the investor wants to see and what you think is most connected to what you're trying to accomplish well there's that the transparency in having those conversations too where if the funder is asking for something that you're not able to produce letting them know that this is something I'm not able to do yeah it's an interesting question because theory of action and metrics in place I would say on the earliest stages like that would be pretty advanced so we don't we don't always even work with investees who are there yet so I don't know that I can really address what you know what happens if those things aren't in alignment because I think we're kind of at that at that starting point still around like how do we work together maybe to develop a theory of change or theory of action and and then identify the right metrics so I appreciate the question I think it's at the stage that we're at it's not something that we we see often well I I don't want to plug a certain like framework or anything because we work a lot of them and like a lot of them but I know we've worked a little bit with like the impact management framework or impact management project impact frontiers and I found that to be like especially compatible with like plugging into a theory of change so like on the kind of that would sit there's a lot of mapping to do to the outputs and then you need some assumptions to go from outputs to outcomes but I think that that's been a very useful tool to sort of draw a bright line between the effectiveness or the performance of the impact portfolio and a theory of change in terms of the I'm thinking of some examples without naming actual examples so clearly like in the impact management framework you think about the who well what they're doing could be right in line they're providing you know an intervention that's improving enrollment but let's say the actual who that they're serving is not in alignment with your theory of change and it's really very privileged you know students who don't otherwise really need you know that particular intervention and I think you can see of the frameworks we've seen that's been a very effective tool for looking at a theory of change sort of on a parallel path as your your your you know impact portfolio and in a theory of change is just that it's not it's supposed to evolve as the organization moves and grows so the theory of change that you have in year one is going to look different than year five and it should it should not be the same the metrics should evolve and change as the organization evolves and changes great I know that we're just about up on time I think the word convenient was also used in the session description and I I just wanted to say we didn't dwell on it much but Jamie lightly referenced the fact that there are more tech enabled platforms to lessen the burden of portfolio reporting both financial and social metrics and we're we're super excited to dialogue with anybody about those because we think that those are going to greatly help the field in in improving the portfolio management and welcome any other comments or questions as we wrap up I think I heard you to say that in DEI I'm sort of monitoring and reporting how can that be done to protect the individuals any any thoughts on that I have it like a word I just that's a great question I don't a very short story I know it's late on time we used to reserve we had a farmer's market serve migrant farmers and we wanted to collect all this DEI information income information when we started doing that it dropped to like 80 percent because people like I am not filling out those forms and it hugely compromised the work we were trying to do I think one of the things it's just a side note because that sensitivity is very real in I know in our work in some instances that is a real barrier collecting the information to and there's a real case to be made that it's like you know you can't you can't do your work if you're trying to collect that I think we would guide not to collect that information more often than not it's not a huge impediment at least in our our you know use cases where it could be you know even the the fund management team the company team the governance and then the underlying beneficiaries if possible usually that especially with something like the tech enabled companies it's a component of the product to have an intake that collects that and we asked for it we are also aware that their instances where it is it would really challenge their work and we don't we don't advise collecting it