Impact Investing

The most exciting businesses today are the ones that improve the planet while making a financial return for the entrepreneurs who drive them and the risk takers who provide capital to fuel them. This creative capitalism is being put to work in areas such as: alternative energy, healthcare, accessible communications, new models of affordable housing, educational services, improving agricultural output in the developing world, banking and finance for the underserved, sanitation, transportation, and finding profitable ways to clean up the environment, from tire dumps to clogged rivers to the air we breathe.

Yet, many such “social entrepreneurs” do not have access to adequate or appropriate sources of capital or to the strategic advice that is on tap for the more prosaic start-up in Silicon Valley, Austin or Shanghai. These are businesses built from the heart, not from a spreadsheet. But when they succeed, they not only reward investors and management with financial returns, they also provide a sense of accomplishment and meaning that is too often missing in modern endeavors.

What is Impact Investment?

Impact Investment means investing in companies and enterprises whose goods or services will make the planet a better place.

Unlike NGOs, impact investments are made with the expectation of an explicit financial return, and are not largely dependent on external subsidies. Impact investments are expected to generate self-sustaining revenues and achieve scale.

Impact investors have the opportunity to develop a business model that addresses a particular social issue or mitigates the very risk of operating in the environment (e.g. pre-paid phone cards in Europe, Asia and Africa). Frontier markets present a great opportunity for impact investments, especially in the areas of alternative energy, healthcare, agriculture, education, communications, banking and finance, and others.