(Photo by iStock/Ridofranz)
Last year, Hatch Africa’s chickens produced 4.5 billion eggs across six countries. What began in 2010 as a single poultry farm in northern Ethiopia has since put supplemental income in the pockets of thousands of smallholder farmers, improved nutrition for children, and built a new market for affordable protein. And it did all of this as a profitable company.
By any measure of what impact investing exists to do, Hatch is a remarkable success. But the simple rubric of “is it a unicorn?”—a company with a $1 billion valuation—misses all of the above. For Hatch was designed to be something we don’t yet have a name for but that matters greatly if we are to build a world that puts people and planet, not just profit, at the center.
I started Acumen 25 years ago, before the impact investing sector had a name, on the conviction that markets and capital, used with patience and moral imagination, could solve some of the hardest problems of poverty. Over the years, my colleagues and I have been asked repeatedly how many unicorns we've produced—at investor conferences, in due diligence meetings, by journalists looking for a hook. Fund managers increasingly get benchmarked against venture-style return multiples, even when their mandates are built around patient, concessionary capital. The honest answer is humbling. Of more than 240 companies we’ve backed, exactly one—Esusu, which is dismantling barriers to housing and helping close the racial wealth gap—has reached a billion-dollar valuation. We are deeply proud of Esusu. But the prevalence of the question itself points to how much the impact sector has given way to Silicon Valley’s definition of what it means to succeed.
The Unicorn and Its Discontents
By borrowing the unicorn, the impact world also inherited much of the incentive architecture of Silicon Valley. As impact investing matured and went looking for legitimacy, a billion-dollar valuation became shorthand for ambition, proof of scale—the sector’s evidence that it belonged at the grown-ups’ table.
But with the unicorn, it imported more than a metric. It imported scale thinking and a culture. Move fast and break things. Burn capital to capture market share. Treat your earliest customers as experiments. That operating philosophy can work well enough when you’re building software in a developed market with consumer protections and customers who can absorb the cost of your mistakes. It can do real harm when you’re building off-grid solar or delivering agricultural inputs to people living on $3 a day. This is not hypothetical: the Andhra Pradesh microfinance crisis of 2010 and the collapse of several off-grid solar companies in the 2020s offer cautionary lessons in what happens when growth-at-all-costs logic meets fragile communities.
A billion-dollar valuation is a single metric. It is forward-looking, purely financial, and blind to almost everything else a company—or a society—might value. Valuation tells us a great deal about what investors expect to gain. It tells us nothing about whether the world is meaningfully different because that company exists. The economist Mariana Mazzucato argues that we've lost sight of what value really means; a price is not the same as worth.
Consider what the unicorn metric renders invisible. Acumen’s portfolio has reached nearly 800 million low-income people, created hundreds of thousands of jobs, built entirely new markets, and reshaped systems for people the global economy had long overlooked. None of that registers if your scoreboard only counts valuation.
Our sector has felt this dissonance for some time and has reached for alternatives. "Impact unicorn" tried to marry mission to valuation. The zebra, too, emerged as a counterframe—a company that is both profitable and purpose-driven, mutualistic rather than winner-take-all. These were thoughtful attempts to solve a real problem. None has yet given the field what it most needs: a rigorous and resonant way to recognize the organizations that actually change the world, and to connect them with the investors who would back them.
What a Better Framework Might Look Like
If valuation is the wrong measure, what’s the right one? I’d start with a single question: Is the world meaningfully different because this organization exists?
From there, I can imagine at least five dimensions worth measuring. Reach—how many lives are touched. Depth—how fundamentally those lives are changed. Durability—whether the model can sustain itself without permanent subsidy. System effects—whether norms, markets, or structures have shifted in ways that outlast and outrun the organization itself. And financial resilience—whether the enterprise can endure and grow on its own terms.
I’ve also been thinking about what we might call an organization that meets those criteria. A butterfly. Not a mythical creature in an enchanted forest, but a real-world process of change. The best social impact work looks like a chrysalis: slow, unglamorous, often invisible—and then suddenly the world looks different. In chaos theory, the butterfly effect describes how a small change in one part of a system can produce enormous consequences far away, which is precisely what happens when an organization shifts a norm, rewrites a law, or rebuilds a market. The change travels far beyond the reach of the organization’s own wingspan. Think of Sun King and d.light, the solar pioneers who together have brought electricity to more than 300 million people. Or Hatch, and Esusu, and BURN, a clean cookstove company that has saved millions of trees and improved the health of millions of people who relied on dirty cooking fuel. Each, by this measure, is a butterfly.
There are other measures worth considering: replication fidelity—does the model travel without its founder? Generativity—does it create conditions that independent actors can build on without the original organization in the room? And balance over extraction—does it take only what it needs, the way a butterfly feeds on nectar without harming the flower?
The organizations that create the most durable social impact often grow deliberately, rebuild rather than disrupt, and serve markets that don’t scale at the same rate as software. That’s a feature. Maybe social enterprises in general are fated to be smaller. So the question isn’t why the impact sector has so few unicorns; it’s whether unicorn was ever the right measure. Companies that prove it’s possible to deliver audacious social change and long-term financial sustainability deserve a language, a metric, and a measure of success worthy of what they’ve built.
Labels Matter
When I entered business school in the late 1980s, Bill Drayton of Ashoka had begun to popularize "social entrepreneurship," but terms like impact investing and patient capital didn’t yet exist as things a young person might aspire to. If you wanted to pursue that path of using business in service of social change, you needed to walk on uncharted territory. There were no guideposts, and there was no language for what some of us dreamed of doing.
Names matter more than we think. They give shape and legibility to ideas, and help direct society’s talent and ambition toward what we’ve decided is worth labeling and pursuing.
“Entrepreneur” spent centuries as a specialized economic term, but it wasn’t until the 1980s that it became a global cultural identity that millions now aspire to. Microcredit and microfinance described a practice that had existed in various forms for generations before Muhammad Yunus systematized it and carried the name across the world—and in doing so helped create a global financial inclusion movement. Closer to home, “impact investing” was coined in 2007. Within a decade it had an industry association, university curricula, and billions of dollars in dedicated capital flowing toward it. “Patient capital”—a term we at Acumen helped popularize—gave funders permission to think differently about time horizons and return. In 2007, Thomas Friedman devoted a New York Times column to patient capital, helping carry the idea beyond our sector and into the mainstream.
Each of these naming moments did more than describe something that already existed. They made the thing easier to see, easier to fund, easier to pursue. (In some cases, the definitions of terms like social entrepreneurship and impact investing became so popular and inclusive as to lose some meaning.)
What We Celebrate Shapes What Gets Built
There is a logic here that we ignore at our peril. Metrics shape incentives. Incentives shape funding. Funding shapes what gets built, and who gets to build it. If the next generation of entrepreneurs and investors takes its cues from the success stories our field chooses to hold up, then we had better make sure those are the right stories.
For as long as I can remember, the world has held up a damaging binary, one that lingers even within the impact world: maximize returns over here, give money away over there. Charity on one side, capitalism on the other. Under that framework, the poor remain permanently dependent on someone else’s goodwill. But our experience shows another way forward, one of impact-driven enterprises delivering both audacious social change and long-term financial sustainability. We don’t have to choose between the two. The companies that prove it’s possible deserve a language worthy of what they’ve built.
Read more stories by Jacqueline Novogratz.