A new report from the Global Impact Investing Network offers guidance for those who want to make sure their investments keep having an impact after they cash out.
Based on a survey of 33 investors, advisors, and social enterprises covering the lifetime of their investments, GIIN provides some answers for impact investors:
- Pre-investment: Look for investments that embed impact in the business model or the path to financial success. Invest where founders are committed to the impact mission.
- At the time of investment: Structure capital — whether private equity, debt or an alternative — to set up an exit that’s well understood. Be sure you and the business are aligned on impact. Make sure impact is included in the documentation.
- During investment: Create governance, employment and supply policies that allow positive impact.
- At the time of exit: Choose a time to exit that allows a company continued access to resources and success. Select follow-on investors who understand and will support the impact model and a path to growth.