Q&A: Impact Investing with Jesús Salas

Investor & Founder Series with Jesús Salas

This article is part of Rebel One’s “Investor & Founder Series”, a series of recorded interviews with CEOs and investors recently launched by RBL1, a leading venture capital firm and investor network based in New York City. You can view RBL1’s investor training programs and new content here.

In a 2020 Episode of Rebel One’s Investor and Founder Series, Jesús Salas, an impact investor out of Colombia’s MBA program, shares the journey to his current position as an associate on the Responsible Technology team at the Omidyar Network. In this 34 minute interview, Jesús covers his personal story, his work at the Omidyar Network, and the evolution of the fund as it strives to be both impactful and profitable even in times as unprecedented as the COVID-19 pandemic.

Here are some of my major takeaways from the interview (not direct quotes):

Can you talk a little bit about the choices you made to get into impact investing and your journey to the Omidyar Network?

Yeah, this could be a long conversation. There’s no particular moment or decision that defines my path, but I’ll mention a couple of things. It’s been a grind, a lot of hustle, and a little bit of luck. In undergrad I had some startup experiences including an internship with a startup called Tala while I studied abroad in Chile. That was my first exposure to micro finance and social entrepreneurship. Another key experience was the time I took off from undergrad to pursue my own startup idea. While things didn’t work out between my co-founder and I, those experiences were valuable in my formation. Fast forward a little bit, I did consulting with Deloitte, and then through a fellowship, left Deloitte and got placed with a nonprofit impact investor that was doing micro finance. At the nonprofit impact investor, I was doing debt investing. I felt like that’s where I wanted to take my career but I knew that I wanted to move to earlier stage work given my previous startup experience. I grew up in a first generation household where my parents modeled how to hustle to make ends meet. I wanted to marry this entrepreneurial itch with impact investing. I eventually decided to pursue my MBA and the driver for that decision was ultimately to move into early stage impact investing. I really benefited from going through programs like MLT (Management Leadership for Tomorrow), and through that program specifically, I developed the game plan to make my goals a reality. I chose Columbia Business School and benefited from the opportunities there such as serving as co-president of our impact investing fund and interning for Rethink Education throughout my second year. I spent the entirety of my second year hustling: I had 40 plus interviews and 40 plus coffee chats in that second year alone. I had known about Omidyar Network ever since I had joined the nonprofit impact investor. I followed them closely, applied to multiple roles, kept getting rejected, but kept knocking on the door. Ultimately, somebody said, “Alright, let’s give this guy a call”. About a month before graduating, I finally received an offer, but it was only an offer for five months as a contractor. Again, another long story short, they ended up giving me a full time role. If nothing else, I hope my story goes to show you that it’s a little bit of luck, a little bit of effort, and the right timing.

Can you share about the Omidyar Network and how it is unique for impact investors?

The Omidyar network was funded by Pierre Omidyar — one of the founders of eBay. It originally started exclusively as a foundation but around 2005 they got an LLC which allowed them to do for profit investing. Since then, they’ve been doing both for profit and not for profit investing in a couple of different areas. The secret sauce, if you will, is this dual checkbook approach of door for profit and nonprofit. Through this method, they’ve deployed over $1.7 billion in assets, half of that has been for profit, half for nonprofit. The issue-based approach led to many focused projects to spin out into their own funds. Some of those are around financial inclusion, education, civic tech, many more. The big change that’s been happening is the spin outs, the only difference is that they’re independent entities with new names still funded by the Omidyars.

What’s the process by which you come up with a new initiative and set up new organizations around it?

Often, founders and investors make their path sound so linear, but when they’re going through it, nothing makes sense and everything is messy. What I mean by saying that is, when Omidyar Network got LLC to do private for-profit investing back in 2005, I don’t think they thought this dualistic system would end up happening. Things grew very organically and eventually they said, “Hey, there are issues that the Omidyar shares and the employees care about, they want to figure out how to deploy capital into scalable solutions”. Some of these organizations were so successful in their work that many of the investments that they had made scaled significantly. To use an analogy, the kids that we had been raising were ready to go off to college. Many of these issues developed as ideas or experiments and at some point they gained a lot of traction. Now the “spin out” is letting them go meanwhile they still get support from the Omidyar group. In the beginning, each of these ideas are a little bit messy because it’s like developing in any other investment business. You need to figure out, “What are the problems?”, “Where could you be value add?”, and “What is the vision for the future?”

Where are you and what are the next steps?

First and foremost, my job is to focus on my role at Omidyar Network for the next three or four years. Right now we’re building something from scratch around our privacy security thesis — a project I want to see through. But the long term goal, call it five to ten years, I want to be managing my own fund, ideally focused on underrepresented founders that come from communities like my own. An example of this type of impact is called Access Project, where mentors offer office hours for underrepresented founders. That’s what motivates me, but first things first, doing well in my current job takes precedence while on the periphery I’m planting those seeds that I can sow later on.

For those considering the impact investment field, what advice would you give them?

At a high level, I’d say focus on what your impact is, figure out who’s doing those things, how to work for them, and how to get there, or alternatively, how to start your own fund.

You must first and foremost define what you mean by impact. You cannot let others define that for you. If for you impact means the environment, or funding underrepresented founders, or “XYZ”, let that be your guiding light. From there, you can figure out which firms and/or funds are focused on your areas of interest and begin conversations with them. I think the results of people coming out of Rebel One, allows people to see, “Hey! It’s possible”. I’m a product of that, because I can see fellow colleagues from these programs landing positions at places such as Precursor Ventures or Harlem Capital. They’re making an impact and we need more of that.

If you’re interested in learning more about Jesús’ experiences, you can watch the full interview here. If you are a motivated investor or young professional like me, I would highly recommend checking out RBL1’s Youtube channel for more videos on how entrepreneurs and investors are changing the world.