Hi Priya, tell us about your background at the intersection of investing and impact, and what you are focused on building at Impact Engine.

Impact Engine is an institutional impact investment platform. We've been around for 11 years and everything we do focuses on generating market rate, financial returns alongside meaningful and enduring impact in the areas of environmental sustainability, economic opportunity, and health equity.

These 3 thematic areas are all societal challenges where we believe commercial solutions can address gaps and in large enough markets to be able to do that while generating strong financial returns.

We invest in these thematic areas in two ways, by investing in funds like Lumos as well as directly in companies from early to growth stage. We are structured as a Public Benefit Corporation (PBC), and our public mission is to grow the ecosystem of investors and companies driving financial returns linked to social outcomes.

Can you share a little bit with us about what you look for in an investment whether direct or on the fund side, and how you support your portfolio funds and companies.

At the end of the day we are looking for a GP or a company that has the intention to build their business or their strategy for the long term. From there, they should have a dual objective: the impact drives the financial return, and the financial return drives the impact. From our perspective, both have to exist and are equally important. The next layer is that they have to have the background and experience, both professional and personal. For example, in the education space, whether it's an entrepreneur or an investor, we're looking for people who have, either grown up professionally investing in education and/or have been a faculty member, staff, or a policy maker in the space, etc. They need to have some kind of intimate view as to why things don't work, why there are gaps, and who gets what and why and what we could do to bridge it.

Now, what's missing from this whole description? Notably they don't need to be labeled “impact.” It's our view that these types of businesses and strategies have existed for many, many decades before the label existed. We look for “impact” in their intention, the depth of their know-how, and the evidence that helps us believe where someone is on their journey has led them to start this fund or business.

How did you first meet Lumos? What was your first impression?

This is a fun story. A really good friend of mine said “I don't know impact like you do, but I heard of this fund and it just smells like it's something up your alley. Do you want to talk to them?”

I did a call with James back in 2018. I found him to be very honest. He didn’t, at the time, really know if Lumos qualified as an impact fund. So I kept asking him questions. We both quickly realized we were actually learning from each other at the same time. I've observed the proliferation of early stage EdTech funds for many years and had always wondered why there were no growth funds. So I kept pushing James to test my own conviction while I was pushing him on impact.

My first impression was that this was a team that was really intellectually honest. They were asking just as many questions as they were providing answers and felt like their hearts were in the right place. That's been one of the central things and value-adds from our relationship with our fund managers, this dynamic where we are constantly learning from each other.

Tell us about the role of an Impact Advisory Council (IAC) and how you engage with funds like Lumos on an IAC.

There are a couple of key objectives: first off, to provide an external feedback loop to hold yourself accountable as a structural imperative, especially when not every LP is very active. Secondly, it helps with coordination. As investment firms grow up and become more institutional, those LPs start to have a lot of opinions about things. So an IAC is a mechanism to say “Nope, we have an Impact Advisory council. They consider it all, and they help guide us as to what we will do.” Lastly, I see it as a real trusted group where you can be really honest about what you can't seem to figure out. There are real challenges all companies, funds, and individuals will face. It is helpful when you can turn to an IAC and know that it will be held in confidence, and you'll get real counsel. Those are my 3 goals. Outside of this, I think the effect is that it ends up making it very clear to the world that you are serious and so it's a signal.

How have you seen Lumos evolve in our impact journey from the beginning to today? What areas could you see us continuing to develop?

We don't expect anyone to have it all figured out all at once. From day one your focus was on the definition of impact. You all led a conversation with us about this definition that included dimensions around effectiveness, access, and ultimately equity. So now, how will you demonstrate the evidence? You all are starting to use frameworks to drive towards effective KPIs and a theory of change.

This is where I see Lumos developing. All entrepreneurs are purpose-driven in good times, but it is about continuing to prioritize impact when companies are faced with challenges. You need to have that sparring partner among the board, investor, and the management team to have impact integrated in product strategy and growth. I'm hoping that Lumos over time continues to prioritize impact even as companies go through messy situations.

Looking at the broader ecosystem of impact investing, what right now is most exciting to you?

I’m seeing the systems change piece being activated. I'm seeing more and more people actually excited about the idea of making impact a common strategy within traditional funds. So there has been a talent shift, where very talented young people who are coming into the investment industry are now wanting to do something related to impact. That's really cool because anytime we disconnect who we are from what we do, we have a problem. Conversely, anytime you bring who you are and what you do closer together, we excel. I've been in this space for 20 years now and I never ever thought it would have gotten here.