The Impact Capital team 

  1. Provides social entrepreneurs with financial coaching
  2. Educates investors about impact investing for social and financial returns
  3. Unlocks funding to social entrepreneurs through innovative financial products 
  4. Practices 100% impact portfolio activation

What Is Impact Investing?

Impact investing is actively placing capital in businesses and funds that generate social and/or environmental good and a range of returns, from principal to above market, to the investor
— Adapted from the Monitor Institute: investing for Social and Environmental Impact
 

What are the categories of impact investing?  

In practice, impact investing is a range of activities along a spectrum, with certain investments generating higher impact than others.  An impact-first investment falls along the right end of the spectrum and places a higher emphasis on the optimization of social or environmental needs with a floor on financial return, although new studies have shown that impact-first investments may not actually result in a return trade-off.*

Impact investing is closely related to, but not the same as, responsible investing (the left end of the spectrum), which is often linked to screening out investment opportunities (i.e. public equity) that may harm the society or environment.

Why Impact Invest?

It is becoming increasingly clear that governments alone cannot meet the challenges set by poverty, rapidly growing populations, rising food and energy prices, insufficient health care, environmental degradation, and other issues facing developing countries. Impact investors believe they can play a part in shaping a better future by supporting social entrepreneurs who are establishing viable businesses with significant potential for growth and social impact. 

By partnering with social enterprises, impact investing has the ability to tackle some of the world’s toughest environmental and social problems that philanthropy and governments alone cannot. The traditional fork-in-the-road approach - that social problems should be addressed by philanthropy and for-profit activities should focus on maximizing financial return - is now merging. We believe in the “AND” model: impact investing can earn a respectable financial return and deliver positive social impact.

Check out the hundreds of social entrepreneurs from varying sectors and regions who graduated from our most rigorous GSBI Accelerator program.

 

The Need For Capital Aggregation

 A Three Phased Approach

In phase one, foundations, philanthropic organizations, or local governments support the development of enterprise infrastructure - the critical business information, processes and technology needed to execute a social enterprise's mission. However, this support, through grants or "soft capital," usually does not result in a profitable, self-sustaining business.

A second development phase, supported by investment capital, concentrates on a cohesive business model, ability to scale, and subsequent growth and profitability. This new source of investment carries much different measures and priorities. Social enterprise management is often unable to adjust to these expectations without intercession by capacity development organizations.

A third phase focuses on sustainable operations, predictable growth, and consistent free cash flow to make the enterprise "bankable" and ready for commercial debt sources to support its growth capital needs.

Venture Capitalists Have It Easy

Venturing Investing in the developed world

  • Targets of opportunity are sourced locally
  • Investment syndicate drawn from local venture capital relationships
  • Results of venture capital backed product or service has a global impact
  • Ready-made pools of "up-round" capital waiting for winners to emerge from previous financing

Venturing Investing In The Developing World

  • Targets of opportunity are sourced remotely
  • Investment syndicate drawn from the global impact-investing community
  • Results of venture capital backed product or service has a local impact
  • Scarce "up-round" capital