You are previewing Impact Investment: A Practical Guide to Investment Process and Social Impact Analysis.
O'Reilly logo
Impact Investment: A Practical Guide to Investment Process and Social Impact Analysis

Book Description

Apply a rigorous investment process and integrate social impact analyses to successfully select and invest in social impact investments

Impact Investment: A Practical Guide to Investment Process and Social Impact Analysis is a must-read guide for investors and wealth managers entering the social finance investment space known as "impact investing." This book walks readers through the demanding task of properly executing an impact investment strategy, providing solutions to some of the most vexing challenges that arise when investing for both financial return and social impact. Readers will learn how impact investing is different from other strategies, how the organization's mission affects investment decisions and structures, and what to look for in an organization prior to investing. A running example of a village distribution company illustrates the methods and concepts in action, and a full-fledged case study utilizing downloadable professional level analytical tools consolidates all examples into a real-world setting.

Impact investing is generating significant momentum, but many individuals operating in this space come from alternative backgrounds and lack the knowledge to form a rigorous investment process. Disparate funding sources, immature markets, variations in fund economics, and the need to generate and report social impact all complicate the industry even further, creating a barrier for curious investors. This book is a guide to applying standard investment processes and social impact analyses to impact investing, helping readers:

  • Adjust standard analysis techniques to suit the particularities of impact investing

  • Discover how social mission influences the entire investment from entry to exit

  • Plan and execute a robust custom impact investment strategy

  • Understand social impact entities and the management of impact investments

  • Investing with the goal of social impact doesn't remove the need for rigorous investment techniques and diligent processes. Impact Investment: A Practical Guide to Investment Process and Social Impact Analysis is a guide to putting it all together, for a more targeted approach to impact investing.

    Table of Contents

    1. Cover Page
    2. Title Page
    3. Copyright
    4. Contents
    5. Preface
    6. Acknowledgments
    7. CHAPTER 1: Introduction to Impact Investing
      1. WHAT IS AN IMPACT INVESTMENT?
      2. WHO MAKES IMPACT INVESTMENT?
      3. HOW THIS BOOK IS DESIGNED
      4. NOTES FROM THE FIELD
      5. WHAT THIS BOOK IS NOT
      6. SETTING FORTH
    8. CHAPTER 2: Sourcing and Screening
      1. SOURCING STRATEGY
      2. GEOGRAPHIC ANALYSIS
      3. COUNTRY ECONOMIC ANALYSIS
      4. BEYOND GEOGRAPHY AND ECONOMICS
      5. SOURCING FOR IMPACT
      6. SCREENING PROCESS
      7. A LOOK AT THREE POTENTIAL INVESTMENTS
      8. MOVING FORWARD WITH AN INVESTMENT
      9. CONCLUDING THOUGHTS ON SOURCING AND SCREENING
    9. CHAPTER 3: Investment Analysis and Valuation
      1. INFORMATION EXCHANGE
      2. SOLERO BOTTOM-UP ANALYSIS
      3. THE SOLERO PROJECTION MODEL
      4. VALUATION MULTIPLES
      5. DESKTOP DUE DILIGENCE: SOCIAL IMPACT MAPPING
      6. CONTINUING THE INVESTMENT PROCESS
    10. CHAPTER 4: Due Diligence and Investment Structuring
      1. DUE DILIGENCE
      2. UTILIZING DUE DILIGENCE INFORMATION
      3. LIQUIDATION PREFERENCES
      4. CREATING AN INVESTOR BASE AND DOWNSIDE CASE
      5. BRIDGING POTENTIAL VALUATION GAPS WITH CONVERTIBLE DEBT STRUCTURES
      6. AGREEING TO TERMS
    11. CHAPTER 5: The Term Sheet and Definitive Documentation
      1. THE TERM SHEET
      2. ANTI-DILUTION
      3. DEFINITIVE DOCUMENTATION: THE SUBSCRIPTION AGREEMENT
      4. DEFINITIVE DOCUMENTATION: THE SHAREHOLDERS’ AGREEMENT
      5. FINALIZING THE INVESTMENT
    12. CHAPTER 6: Post-Investment Monitoring, Management, and Value Building
      1. REPORTING AND MONITORING
      2. COMMON REPORTING METRICS
      3. SOLERO'S EXAMPLE IMPACT REPORTING FRAMEWORK
      4. POST-INVESTMENT CASE STUDIES
      5. METHODS OF EXIT
      6. THE END OF THE INVESTMENT PROCESS
    13. CHAPTER 7: Impact Investing Funds
      1. PRIVATE EQUITY OR VENTURE CAPITAL?
      2. THE BASIC CONSTRUCT OF A PRIVATE EQUITY FUND
      3. THE ECONOMICS OF A PRIVATE EQUITY FUND
      4. KEY CONSIDERATIONS IN FUND ECONOMICS
      5. THE DIFFERENCES BETWEEN TRADITIONAL FUNDS AND IMPACT INVESTING FUNDS
      6. BENCHMARKING
      7. CONCLUDING THOUGHTS ON IMPACT INVESTING FUNDS
    14. CHAPTER 8: Investment Alternatives, Challenges, and Outlook
      1. INVESTMENT ALTERNATIVES
      2. IMPACT INVESTING CHALLENGES
      3. IMPACT INVESTING OUTLOOK
    15. About the Companion Website
    16. About the Authors