Deal Structuring in Philanthropic Venture Capital Investments: Financing Instrument, Valuation and Covenants

Scarlata, Mariarosa; Alemany, Luisa

doi:10.2139/ssrn.1635307

Cited by 23 publications

(47 citation statements)

References 92 publications

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“…This new and evolving category of funds is financed by investors seeking opportunities to lend to organizations that create social value at the same time as generating some financial return (Nicholls 2010b). The range of different forms of social investment aiming to meet the need for funds that combine financial returns with social and philanthropic goals includes investment programmes that offer loans at preferential terms for SEs and philanthropic venture capital such as the Acumen Fund (Lumpkin et al 2013, Scarlata andAlemany 2010).…”

Section: Social Enterprise and Financial Resourcesmentioning

confidence: 99%

Social Enterprises as Hybrid Organizations: A Review and Research Agenda

Doherty

Haugh

Lyon

2014

Int J Management Reviews

1,307

1,342

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The impacts of the global economic crisis of 2008, the intractable problems of persistent poverty and environmental change have focused attention on organizations that combine enterprise with an embedded social purpose. Scholarly interest in social enterprise (SE) has progressed beyond the early focus on definitions and context to investigate their management and performance. From a review of the SE literature, the authors identify hybridity, the pursuit of the dual mission of financial sustainability and social purpose, as the defining characteristic of SEs. They assess the impact of hybridity on the management of the SE mission, financial resource acquisition and human resource mobilization, and present a framework for understanding the tensions and trade-offs resulting from hybridity. By examining the influence of dual mission and conflicting institutional logics on SE management the authors suggest future research directions for theory development for SE and hybrid organizations more generally.

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Section: Social Enterprise and Financial Resourcesmentioning

confidence: 99%

Social Enterprises as Hybrid Organizations: A Review and Research Agenda

Doherty

Haugh

Lyon

2014

Int J Management Reviews

1,307

1,342

View full text Add to dashboard Cite

show abstract

“…It differs from traditional investment as it explicitly aims to have a positive impact on society (Addis, McLeod, and Raine 2013;Nicholls 2010b). Impact investment is similar to, but arguably distinct from, other 'positive' investment classes such as 'socially responsible investment' or 'ethical investment' as it seeks to achieve clearly defined and measurable social impact as opposed to simply avoiding negative externalities and focusing on high level environmental, social and governance (ESG) factors (Harji and Jackson 2012;Nicholls 2010b;Scarlata and Alemany 2012).…”

Section: Introductionmentioning

confidence: 99%

“…This paucity is despite the significant early momentum in impact investment, characterized by the rapid initial growth in activity, broad policy developments, and multiple academic studies highlighting access to finance as one of the greatest challenges for the social sector (Nicholls 2010b). Early academic literature on impact investment has focussed on investment structures (Brown 2006;Edery 2006;Scarlata and Alemany 2012;Sunley and Pinch 2012), catalysing private capital (Geobey, Westley, and Weber 2012;McWade 2012;Moore, Westley, and Brodhead 2012), and market formation from an organizational perspective Nicholls 2010c). There is a clear gap in understanding how more traditional investors include impact investment within their portfolios.…”

Section: Introductionmentioning

confidence: 99%

Overcoming the Challenges of Impact Investing: Insights from Leading Investors

Ormiston

Charlton

Donald³

et al. 2015

Journal of Social Entrepreneurship

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Interest and activity around impact investment have increased significantly in recent years as businesses, governments and communities seek new solutions to enable an inclusive and sustainable society in the face of social and environmental challenges. Philanthropists, charitable foundations and institutional investors have been among the early adopters in implementing impact investment strategies and developing the field. Despite the initial enthusiasm for impact investment, many investors raise concerns as they begin to explore the practicalities of impact investing. This paper responds to these concerns by providing empirical insights on how leading institutional investors and charitable foundations have begun to develop impact investment strategies and overcome various trepidations. The findings reveal four main themes: a focus on financial-first investments; the importance of using established due-diligence processes; the opportunity to align mission and values; and, the value of networks and collaboration.

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“…This study focuses on analyzing the factors that influence investors to provide loans to microenterprises that are underserved. Other studies in the social entrepreneurship space focus on analyzing different aspects of social finance or financing for people contributing to the social good or engaged in socially valuable activities (e.g., Scarlata & Alemany, 2010). The microenterprises that are the focus of this study concentrate on developing their own enterprise, and in the process, they create varying degrees of economic and social value.…”

mentioning

confidence: 99%

The Effect of Virtuous and Entrepreneurial Orientations on Microfinance Lending and Repayment: A Signaling Theory Perspective

Moss

Neubaum

Meyskens

2015

Entrepreneurship Theory and Practice

277

233

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The availability of capital for microenterprises has grown rapidly due to microfinancing platforms such as Kiva. The investment decisions of microlenders are challenged due to the limited information about the microenterprises' characteristics and behavioral intentions. Extending signaling theory, we suggest that microenterprises' narratives on microfinancing platforms are an important means to signal valuable characteristics and behavioral intentions to prospective lenders. Results indicate that microenterprises, which signal autonomy, competitive aggressiveness, and risk-taking, are more likely to receive funding, and to receive it more quickly. Microenterprises that signal conscientiousness, courage, empathy, and warmth are less likely to get funded. Rhetorical signaling proactiveness, conscientiousness, courage, warmth, or zeal is negatively associated with loan repayment.

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Deal Structuring in Philanthropic Venture Capital Investments: Financing Instrument, Valuation and Covenants

Cited by 23 publications

References 92 publications

Social Enterprises as Hybrid Organizations: A Review and Research Agenda

Social Enterprises as Hybrid Organizations: A Review and Research Agenda

Overcoming the Challenges of Impact Investing: Insights from Leading Investors

The Effect of Virtuous and Entrepreneurial Orientations on Microfinance Lending and Repayment: A Signaling Theory Perspective

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