Line of Sight Podcast · Don Heider PhD, Brigit Helms PhD

Kusi Hornberger on reimagining the Missing Middle with Impact-First Investing

·30 min·1 clip

Kusi says the “missing middle” often needs $50,000 to $500,000 and gets overlooked by banks, VC, and private equity.

1. Line of Sight Podcast centers this episode on Kusi Hornberger and his argument for reimagining the missing middle through impact-first investing. 2. Don Heider is executive director of the Markkula Center for Applied Ethics at Santa Clara University, Bridget Helms is executive director of the Miller Center for Global Impact, and Kusi Hornberger is a partner and global knowledge lead at Dahlberg. 3. The episode asks how capital can be designed around the recipient’s needs, rather than around the investor’s product menu. 4. Kusi says he entered impact investing through the World Bank Group, first at FIAS, the Foreign Investment Advisory Service, and later inside IFC. 5. He says FIAS advised governments on investment-enabling environments, while IFC’s core role was to provide capital to the private sector and create growth in local economies. 6. He says he learned the field by reading every internal document he could find, which he links to a long-term interest in knowledge management. 7. Kusi says a secondment into an investment team gave him firsthand experience of deploying capital, not just advising on it. 8. He says the term “impact investing” started to bubble up around 2008 and 2009, alongside landmark reports from JPMorgan and others. 9. He says his later work at Global Partnerships gave him more direct experience with “impact first investing” as a full-time job. 10. He distinguishes impact investing from impact-first investing by saying the latter puts impact above commercial return when necessary. 11. He says he agrees that positive outcomes and returns can both be possible, but the world still needs more impact-first investors. 12. Bridget Helms says Miller Center is “considered impact first” and notes that trade-offs become more visible outside sectors like fintech. 13. Kusi defines the missing middle as enterprises with financing needs often between $50,000 and $500,000, though he says the range can run from $10,000 to $2 million. 14. He says banks usually serve individuals, while venture capital and private equity are designed for high-growth businesses and larger ticket sizes. 15. He says that leaves many viable businesses sustainable enough to return capital but still outside traditional capital criteria. 16. He says there is no single answer, and financing should be tailored to the enterprise’s capital intensity, aspirations, growth path, and market. 17. He says patient capital is about tailoring to the needs of the recipient, not just offering a standard instrument like equity or debt. 18. He says many missing-middle enterprises mainly need debt for working capital, and he warns that hybrid instruments can be fetishized as hammers looking for nails. 19. The tone is conversational and analytical, with Don Heider and Bridget Helms using follow-up questions to move from definitions to practical cases. 20. The discussion will suit listeners interested in impact investing, missing-middle finance, and AI in social impact, and may not suit listeners looking for a short, nontechnical overview.

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