My Summer Internship: Exploring Impact Investing at Equatora Capital
From Tech Startups to Impact Investing
Before joining INSEAD, I worked in the technology industry, leading various functions and business units for tech startups. My role centred on driving business growth and delivering financial returns for our investors.
This summer, I decided to pivot towards a new and exciting challenge—impact investing. I switched sides for the first time to the investor side by taking on the role of Impact Investment Analyst at Equatora Capital.
Understanding Equatora Capital
Equatora Capital is an impact investment firm focusing on scaling and commercialising sustainable business entities and nature-based solutions. The firm operates at the intersection of finance and sustainability, acting as local partners, due diligence providers, and co-investors alongside Limited Partners (LPs). Equatora focuses on Sustainable Business Entities (SBEs) operating within or impacting jurisdictional areas in Indonesia, offering blended financing solutions that combine grants, loans, and equity investments to support sustainable value chains.
In my role, I've had the opportunity to explore the nuances of impact investing. In this field, investments are not just about returns, but also about making a difference.
Key Learnings from My Internship
Investing in Startups vs. SMEs:
One of the first lessons I learned was the significant difference between investing in startups and Small and Medium-sized Enterprises (SMEs). In the tech startup world where I previously operated, founders often have a clear vision and a roadmap; the leadership role is more autonomous, with investors providing resources and stepping back. However, the approach is far more collaborative in the impact sector, particularly with SMEs. From pre-investment to post-investment, the support needed is comprehensive—spanning working capital loans, talent deployment, fundraising assistance, and regulatory guidance. It's about building a partnership and working closely to ensure success.
The Need for a Blended Financing Model:
Another crucial insight was the importance of a blended financing model in impact investing. Unlike traditional VC investments that focus mainly on equity, at Equatora, we tailor financing solutions to the specific needs of the businesses we support. This often involves a mix of grants, loans, and equity investments structured to address the unique challenges of sustainable enterprises. The goal is not just financial returns but also to ensure these businesses' long-term viability and sustainability.
Different Expectations from Investors:
Finally, I observed a marked difference in impact investors' expectations compared to traditional venture capitalists. While financial return is paramount in mainstream investing, impact investors often prioritise social and environmental outcomes, sometimes accepting sub-market financial returns in exchange for positive impact. Some deals are driven more by the potential for societal benefit than profit, reflecting a broader view of a successful investment.
Reflecting on My Experience
Reflecting on my summer at Equatora Capital, one key takeaway stands out: I am deeply grateful to have had the opportunity to work with people and ecosystem players who are genuinely passionate about using business as a force for good—INSEAD's guiding philosophy.
I also want to sincerely thank the Hoffman Institute for its financial support. Their internship stipend made it possible for students like myself to devote our time to impact-focused internships, allowing us to gain invaluable experience in this critical field.
This summer has been a transformative journey, broadening my understanding of how business can be leveraged for the greater good and deepening my commitment to making a positive impact through my future career endeavours.
