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Impact Flock 2026: Making systems change practical in venture capital

Writer: ImpactVC
ImpactVC
Oct 6
9 min read

For the fourth year running, the impact venture community gathered in London with a shared ambition: understanding how venture capital can play a more meaningful role in solving complex societal and environmental challenges.


What began as a gathering of 60 has grown organically into a community of more than 140 fund managers, LPs, impact leaders and ecosystem experts. Co-organised by ImpactVC and Impact Europe, hosted by Sustainable Ventures with the kind support of Mozilla Ventures, Impact Flock 2026 brought together around 140 fund managers, LPs, impact leaders and ecosystem experts for a day of candid discussion under the Chatham House Rule. 



Sessions spanned a broad range of topics, ranging from women's health and nature-based solutions to AI governance and fund design and diversity.


Impact investors are increasingly looking beyond the company itself, recognising that if the goal is systems change, they must understand the wider systems in which those companies operate, from policy and incentives to infrastructure, labour markets, and public trust.


"Systems change" can sound abstract, but it comes alive once you break it into tools and actions: finding bottlenecks, thinking across different time horizons, tinkering with incentives, and building in ways to genuinely listen to the people in the system you're trying to change. None of it takes months of introspection to get started.


And the capital is there to act on it. Venture capital flows are in an odd place right now, but LP interest in impact themes is real. This year more than 50 LPs were in the room, twice as many as last year. The capital they put to work has the potential to tilt financial and societal systems, especially if they focus on the places where their portfolios can be more than the sum of their parts.



Starting with the outcome


The opening fireside invited attendees to flip the script on the usual venture playbook. 


Rather than beginning with deals and asking what impact they might create, speakers argued that systemic investing requires starting with the outcome one wants to achieve, identifying the barriers preventing progress, and then determining which forms of capital, collaboration and policy intervention can remove those barriers. 


This framing appeared again and again throughout the day. Discussions on energy quickly moved beyond renewable technologies themselves and towards grids, transmission and market design. Nature-based solutions focused less on innovation and more on financing structures and incentives. Conversations around AI increasingly centred on governance, ownership and worker voice rather than technology alone. 


Underlying all of these discussions was a broad recognition that capital is only one lever among many. Policy often determines whether markets emerge. Infrastructure determines whether solutions scale. Social norms determine whether changes are accepted. Investors seeking systems change therefore need a wider lens than traditional venture investing has typically required.


The opening session also triggered one of the day's recurring debates: whether impact incentives should be formally embedded into investment structures. Some participants argued that impact should already be inherent in a fund's mandate, making additional incentives unnecessary. Others contended that explicit mechanisms are essential if intentionality and accountability are to survive as organisations grow and portfolios mature.




Social licence as an investment variable


One theme that emerged strongly across unrelated sessions was the growing importance of social licence: the public trust and legitimacy that businesses and investors need to operate, beyond what the law requires.


The concept appeared in discussions around renewable energy infrastructure, data centres, AI deployment and nature-based solutions. While the sectors were different, the dynamic was remarkably similar. Communities increasingly want a meaningful voice in decisions that affect them, particularly when costs are experienced locally while benefits accrue elsewhere.


The energy transition discussions offered some of the clearest examples. Participants highlighted growing opposition to infrastructure projects where local communities perceive few direct benefits. Financial compensation alone was often described as insufficient. People increasingly expect consultation, influence and choice regarding how projects affect their communities.


Nature-based solutions revealed a similar dynamic. Farmers emerged not merely as stakeholders but as central actors whose livelihoods depend on how environmental transitions are designed. Successful models are likely to be those that share risk and create direct value for farmers rather than assuming they will absorb short-term costs for long-term societal benefit.


In conversations about AI and economic empowerment, worker voice played a comparable role. Participants argued that technological transitions are significantly more sustainable when workers have agency in how technologies are introduced and deployed.


The implication is that public trust, community participation and stakeholder engagement are becoming central determinants of both impact and commercial success.



Navigating the path from seed to scale


One challenge surfaced repeatedly across sectors: financing gaps.


Participants described a growing "missing middle" in venture funding. As seed rounds have grown larger and the expectations for each stage have shifted, the step from seed to Series A has become harder to navigate, and promising businesses with strong fundamentals and clear impact potential can find themselves between stages.


This issue was also raised in the women's health discussion.


Participants noted that health innovation faces increasing challenges in securing post-seed funding. While significant capital continues flowing into AI and deep tech, healthcare companies often struggle to meet increasingly demanding Series A requirements. In some cases, philanthropic capital is stepping in to support companies at stages traditionally occupied by venture investors. 


The conversation also extended beyond funding structures to the framing of women's health itself. Participants argued that the sector should increasingly move beyond seeing women's health as a niche category. Female-specific conditions account for only around 5% of women’s overall health burden; most of the burden comes from conditions that also affect men but disproportionately affect women or present differently in them. The long-term goal, according to many participants, should be applying a gender lens across healthcare rather than treating women's health as a standalone market. 


At the same time, significant opportunities remain. Participants discussed the potentially enormous market size created by rethinking women's health across cardiovascular care, mental health and broader healthcare delivery. Whether to build a distinct, rebranded category as a stepping stone or let it dissolve into mainstream health remains an open question. 



Widening the pipeline


Who gets funded was another recurring question. Only 2% of VC goes to all female teams. Rather than revisit the familiar barriers behind that figure, the equity, diversity and inclusion session focused on what is already working.


The clearest lesson was that fixing access produces diversity, even without targets. One public investment programme had a first cohort that was 60% women and over 20% ethnic minorities. That came from opening up networks, not from setting quotas. Open applications and lower ticket sizes through SPVs were cited as simple fixes that make a real difference.


The discussion also echoed the missing middle. Data shared in the room showed that founders from state schools fall from 45% of companies at the earliest stage to 25% by Series A. That pushed participants to look beyond gender to ethnicity, faith, disability, neurodiversity and socioeconomic background.


This brings the conversation back to the LPs in the room. Many have capital ready but lack the frameworks, vocabulary and internal permission to use it with a diversity lens. They are also well placed to ask GPs how they actually source deals. Better data would help as well: most European countries do not track diversity in investment the way the UK and US do, and GDPR is often wrongly blamed.



AI beyond automation


Artificial intelligence appeared in nearly every session.


Yet what was striking was how little time participants spent discussing the traditional narrative of jobs being replaced by machines. Instead, conversations focused on more nuanced questions around power, skills, governance and opportunity.


The economic empowerment session was structured around an existing useful framework built around four dimensions: pay, prospects, power and wellbeing. Participants suggested that analysing jobs as single units is increasingly unhelpful. AI is automating tasks, not necessarily entire professions. Whether outcomes are positive or negative depends largely on what organisations do with the capacity that technology creates and whether workers have a say in how the technology is embedded and evolves. 


Several structural challenges were highlighted.


Reliable information about future skills demand remains limited. Career guidance systems often rely on outdated labour market data. Teachers themselves require support to navigate AI-driven changes in education. There was broad agreement that significant opportunities exist for ventures capable of helping people navigate rapidly evolving labour markets.

The session also explored concerns around educational outcomes. Participants discussed emerging evidence suggesting that poorly designed AI tools may undermine rather than improve learning. The conclusion was not opposition to AI, but recognition that design quality matters enormously. Inclusive and pedagogically grounded tools may deliver substantial benefits, while poorly designed alternatives risk generating negative outcomes.


Alongside workforce concerns, discussions on Trustworthy AI focused on governance, ownership and control.


Participants argued that the key impact variable may not be AI capability itself but who controls the underlying infrastructure. The group explored risks associated with concentrated ownership of frontier AI systems and examined alternatives including open-source models, self-hosted modular architectures and federated infrastructure.


Particular interest centred on collaborative approaches to sovereign AI, where multiple organisations or countries work together to build capabilities that would be difficult to develop independently. Participants broadly agreed that distributed ownership models may offer one of the most promising routes towards trustworthy and equitable AI ecosystems.



Nature and energy enter a new phase


Climate-related discussions revealed how much the conversation has evolved.

In the nature-based solutions session, participants noted that approximately 90% of financing still comes from public sources, with private capital providing only a small share of overall funding. The central question therefore was not whether nature matters, but what would need to change for substantially more private capital to participate.


The discussion highlighted the importance of patient capital, blended finance and investment structures capable of accommodating long ecological timelines. Traditional venture models often struggle to align with restoration projects, biodiversity initiatives and regenerative agriculture efforts that may take decades rather than years to realise full value.


Meanwhile, the energy transition conversation argued that renewable generation is no longer the primary bottleneck.


Instead, attention has shifted towards the broader system surrounding generation: grids, transmission networks, storage, flexibility and market design. Participants described a future where affordability could become one of the defining political and social challenges of the energy transition.


Data centres emerged as a particularly interesting case study because they sit at the intersection of AI, energy demand and community acceptance. Participants discussed rising tensions around power consumption, local environmental impacts and questions about who benefits from digital infrastructure investments. Once again, social licence surfaced as a central issue rather than a peripheral communications challenge.



Measuring what matters


Several sessions examined how impact itself is measured, governed and sustained.


The session on impact enablers presented a framework designed to assess companies whose impact flows indirectly through customers, institutions or broader systems. Rather than focusing solely on outcomes, the framework encourages investors to identify the weakest link in a company's theory of change and assess how likely impact is to reach intended beneficiaries.


Participants stressed that many modern ventures create value through enabling others rather than directly serving end users. Assessing these opportunities therefore requires a more nuanced approach than traditional impact frameworks often provide. ImpactVC will be publishing the framework soon - watch this space.


Similarly, the impact-linked compensation discussion explored how incentives can be aligned with impact objectives. Participants generally agreed that compensation mechanisms alone are insufficient. Governance structures, independent validation and strong organisational culture are what ultimately make impact accountability credible.


Yet important questions remain unresolved. How can impact be preserved after exit? How should systems-level contributions be recognised and rewarded? And how can investors balance accountability with flexibility in rapidly changing markets?


Looking ahead


If there was one defining characteristic of Impact Flock 2026, it was an increasing comfort with complexity.


The conversations reflected a community moving beyond simplistic debates about whether impact and financial returns can coexist. Instead, participants focused on practical questions of implementation: how to design incentives, govern technologies, finance transitions, measure indirect impact and engage affected communities.


Across health, nature, AI, energy, diversity and fund design, the same underlying lesson emerged. Impact is rarely generated by isolated interventions. It depends on systems, incentives, institutions and relationships that extend far beyond any individual investment.


For impact investors, that may be both the challenge and the opportunity ahead. Moving from backing good companies to shaping the conditions in which those companies operate is undoubtedly harder. But if the ambition is genuine systems change, it is increasingly difficult to imagine any other path.



Resources from Impact Flock 2026


Impact Term Sheets


Impact-linked compensation and accountability

AI, work and education

Responsible AI 



Upcoming relevant events


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