On developing judgment in impact investing

When I was asked to write an article about “Becoming an impact investing professional,” I found myself hesitating. “Becoming” In the sense of “I wasn’t an impact investing professional but now I am?” This is not precisely how I feel after 2.5 years working at elea. While I can identify with the role, it doesn’t feel like a destination I have suddenly arrived at.

However, even though I don’t know whether there’s a clear destination one reaches to become an impact investing professional, I quickly noticed a distinct difference between my work and that of more senior team colleagues. The concept that’s often used to describe this difference is “judgment.” But what does that actually mean?

My first instinct was to consult AI for a definition: “Judgment refers to a person’s ability to make sound decisions by carefully evaluating information, weighing different factors, and anticipating consequences. It involves a mix of critical thinking, rational analysis, experience, and intuition.” This definition captures the perceived difference between colleagues at different stages in their careers quite well. But it left me with a bigger question: how does one develop judgment in the context of impact investing? To explore that, I’ll start at the beginning of my impact investing journey.

When I started my role as an Associate at elea 2.5 years ago, I felt I ticked a few of the right boxes to become an impact investment professional. When friends or family asked what my new job involved, I would usually say something along the lines of: “Analyzing and supporting the investment process of ventures that seek to alleviate poverty for people living in the Global South.” I believed my academic background with studies in economics, finance, politics, and philosophy, had given me a solid foundation for this role. Combined with my previous work experience in venture capital and management consulting in Europe, I felt well-prepared to contribute to elea’s purpose of “fighting absolute poverty with entrepreneurial means.”

University education is designed to foster critical thinking and rational analysis. Traditional entry-level roles in venture capital and management consulting expect graduates to bring these skills to the table. So I assumed I had two out of the presumably four pillars of judgment covered, at least to some degree. But how does one go beyond that? How can you develop the remaining elements – experience and intuition – and move closer to becoming an impact investment professional?

At elea, we review more than 1’500 impact ventures per year and invest in five to seven. Particularly as a new joiner, I spent significant time sourcing new investment opportunities, knowing that over 99 per cent would eventually be rejected. But if approached thoughtfully, this is far from a fruitless exercise.

Deciding whether to proceed with a venture in the investment process or reject it requires strong reasoning, grounded in critical thinking and rational analysis. To support this, elea’s investment process is built around checks and balances where we can test our assessment of a case with peers:  

• Introductory calls are conducted by two elea colleagues with different seniority levels, ensuring two perspectives from the start.
• The pair jointly decides whether to bring the case to sector experts within elea’s Practice Groups (one per focus topic) for deeper evaluation.
• Cases that advance face the Investment Committee, where they are challenged with hot seat questions.

Each step ensures that decisions are rigorously triangulated, helping the team align around well-substantiated conclusions. While it might sound like a tough process, it offers immense learning: Rather than gaining insights solely from the cases one is directly involved in, the process is designed in such a way that everyone can learn from all impact ventures moving through elea’s sourcing pipeline. In both scenarios – whether a case is advanced to the next stage or the process is discontinued – one’s perspective for evaluating future ventures is sharpened.

Equipped with learnings and confidence gained through elea’s investment process, I was able to form hypotheses about promising ventures and regions to explore. In early 2023, I set off on my first scouting tour across Southern Africa, visiting impact ventures in Malawi, Zambia, and Zimbabwe. While still in Zurich, I researched and reached out to the entrepreneurs I wanted to meet in person. Based on the available information – particularly websites, pitch decks, and financial models – I formed expectations about what I would experience upon arrival.  

Arriving in Southern Africa, I quickly realized how much more there was to each venture beyond what their digital presence conveyed. Meeting founders in person, visiting operations, and engaging with local stakeholders – including those benefitting from the ventures’ activities – painted a much richer picture. It became evident that factors such as team dynamics and skills, the degree of local embeddedness, and the broader market environment play a crucial role in shaping a venture’s potential. Yet these elements are often difficult to assess from a distance.

Traveling through the different regions offered me a glimpse into the realities of building businesses in various African countries – not only from the perspective of the entrepreneurs driving them forward, but also from those whose lives are directly impacted by their work. From farmers receiving fair prices for their produce to mothers no longer needing to travel for hours to access essential medicines – countless individual stories illustrate the importance these ventures play in people’s lives. While I was able to form hypotheses on these topics when still in Zurich based on prior learnings from our pipeline process, the experience gathered in Africa provided valuable insights that challenged, refined, or reinforced my initial assumptions.

With a repertoire of reference cases gathered through our investment process and my scouting activities, I was able to contribute informed judgment to key investment decisions. In 2024, I went on due diligence visits to Mexico City and Dar es Salaam. Such trips are an essential part of late-stage due diligence, providing an additional layer of insight to confirm or challenge preliminary conclusions on critical topics that must be addressed before moving forward with an investment.

At the core of every due diligence is an in-depth analysis of the venture from multiple angles, requiring critical thinking and analytical skills. This approach allows us to engage with entrepreneurs on equal footing and fosters a deeper understanding of their business. Most importantly, the due diligence phase is a great early indicator for both, the entrepreneurs and elea, of the relationship we can build and how it might evolve into a strong, lasting partnership.

However, a good investment decision requires more than sound business fundamentals — it hinges on mutual alignment around the venture’s strategy, impact levers, and each partner’s role in driving success. Achieving that alignment depends on trust, which often must be built under uncertainty regarding the aforementioned points of alignment. Here, the other two pillars of judgment – intuition and experience – are essential: they help both sides read between the lines, sense fit, and assess whether a lasting partnership can truly work.

Spending several weeks with ATEC in Cambodia and Bangladesh brought the four pillars of judgment – critical thinking, rational analysis, experience, and intuition – into even sharper focus. Immersed in the day-to-day realities of a portfolio company, I was able to apply critical thinking and analysis to actual strategic and financial challenges. Whether I was facing ambiguity in financial modeling, sensing alignment during board and investor meetings, or adapting my support to ATEC’s evolving needs, the experiences I had built on the investor side at elea helped to form more nuanced judgment in these situations. More importantly, it reinforced that developing good judgment is not a theoretical exercise – it is a lived process, shaped through exposure, reflection, and meaningful, hands-on contribution.

To answer this question, let’s revisit the definition of judgement – a decisive dimension in which strong impact investment professionals consistently excel: “Judgment refers to a person’s ability to make sound decisions by carefully evaluating information, weighing different factors, and anticipating consequences. It involves a mix of critical thinking, rational analysis, experience, and intuition.”

My journey illustrates how working as an Associate at elea fosters growth in judgment. By learning from diverse cases discussed within the team, visiting ventures and our hubs in Africa and Latin America, conducting in-depth due diligences, and spending time with ATEC in Cambodia, I was able to continuously strengthen and expand on the four pillars of judgment.

Whether I can now call myself an impact investment professional – in the sense of having fully arrived – feels like the wrong question. What matters is that improving on my judgment has certainly set me on the path toward becoming one.

The elea Talent Program (eTP) is directed towards ambitious university graduates. Over two years, beginning each September, elea Associates gain hands-on experience in the global entrepreneurship space, working across multiple countries. Alongside this international exposure, they benefit from structured training, personalized coaching, and ongoing support from the entire elea team.

Author: Jacob Greil, Senior Associate at elea