I’ve started to think that every good impact investment decision needs an optimist, a pessimist and a realist involved.
The optimist instinctively thinks what’s the best that could happen — often imagining the venture developing in ways that even the founders haven’t yet considered. At BGV, unless we can think of an optimist’s case for something becoming huge and having a large positive social impact, it’s not for us.
The pessimist thinks of all the things that could go wrong. If the pessimist’s case is so strong that we would be wasting our money then we won’t make the investment.
The realist immediately imagines what the team will need to do next — thinking of the practical steps. If the realist can’t see how we get from here to there, we have a problem too.
Once all those points of view are out in the open, we have the basis for a discussion about whether a venture is investable or not. This always leads to a bit of drama — or at least a constructive argument — which flushes out all the information and persectives we need to make a decision. Of course the optimist, the pessimist and the realist could all be different people or just one person thinking through each perspective — but I think if you’re pitching for impact investment, it’s worth making sure that you’re appealing to all three character types.