Social Impact Investing

venture capital community. Investors may take an active role mentoring or leading the
growth of the company, similar to the way a venture capital firm assists in the growth of
an early-stage company. Hedge funds and private equity funds may also pursue impact
investing strategies.
Impact investment "accelerators" also exist for seed- and growth-stage social
enterprises. Similar to seed-stage accelerators for traditional startups, impact
investment accelerators provide smaller amounts of capital than Series A financings or
larger impact investment deals. Most Impact Investment Accelerators are nonprofits,
raising grants from donors to pay for business development services; however,
commercially orientated accelerators providing investment readiness and capital-raising
advisory services are emerging.
Large corporations are also emerging as powerful mechanisms for impact investing.
Companies that seek to create shared value through developing new products/services,
or positively impacting their operations, are beginning to employ impact investments
through their value chain, particularly their supply chain.
Impact investing can help organizations become self-sufficient by enabling them to carry
out their projects and initiatives without having to rely heavily on donations and state
subsidies.
Increased Supranational and Pension Cooperation
Governments and national and international public institutions including development
finance institutions have sought to leverage their impact-oriented policies by
encouraging pension funds and other large asset owners to co-invest with them in
impact-informed assets and projects, notably in the Global South. World Pensions
Council and other US and European experts have welcome this course of action,
insisting nonetheless that:
”Governments and international institutions need to do more if they truly seek to ‘unlock’
private sector capital in a meaningful way. They have to ask themselves the following
questions: what are the concrete legal, regulatory, financial and fiduciary concerns
facing pension fund board members? How can we improve emerging industry standards
for impact measurement and help pension trustees steer more long-term capital
towards valuable economic endeavors at home and abroad, while, simultaneously,
ensuring fair risk-adjusted returns for future pensioners?”
Mission Investing by Foundations
Mission investments are investments made by foundations and other mission-based
organizations to further their philanthropic goals. They include any type of investment
that is intended and designed to generate both a measurable social or environmental
benefit and a financial return:
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