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

Scarlata, Mariarosa; Alemany, Luisa

doi:10.1007/s10551-011-0851-8

Cited by 66 publications

(24 citation statements)

References 83 publications

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“…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 . , Scarlata and Alemany ).…”

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

1,308

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

1,308

1,342

View full text Add to dashboard Cite

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“…According to the European Venture Philanthropy Association (EVPA), venture philanthropy is a high‐engagement and long‐term commitment to generate impact through tailored financing, organisational support, and impact measurement and management. The label “venture philanthropy” suggests a similarity between venture capital (VC) and philanthropy, though there are differences: First, VPOs aim at maximising social impact rather than financial return like in the case of VC (Scarlata & Alemany, ). Second, the expertise and knowledge of the SE create value for the VPO, which is generally less important to the VC (Gordon, ).…”

Section: Literature Reviewmentioning

confidence: 99%

“…According to Scarlata and Alemany (), the number of VPOs increased at an annual growth rate of 22% in Europe and 15% in the United States over the period 1993–2008 triggering the interest of mainstream private and institutional investors. In fact, there is an increasing number of coinvestments with VPOs and other investors (EVPA, ).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Scarlata and Alemany () suggest that the social mission and the integrity of the SEs are the most important selection criteria for VPOs. According to Scarlata et al (), during the postinvestment stages, VPOs cooperate with the SEs through different activities such as strategic and governance counsel, access to future investors, human resource advice, financial and accounting management, marketing and communication, legal services, and IT is better consultation.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Because SEs aim is to realise social and/or environmental returns, thus reducing financial returns—Pareto assumption—they struggle to find financial resources (Scarlata, Gil, & Zacharakis, ). SEs have specific ways to access finance (Austin, Stevenson, & Wei‐Skillern, ): venture philanthropy (Di Lorenzo & Scarlata, ; Hehenberger, Harling, & Scholten, ; Scarlata & Alemany, ), social impact investing (Arena et al, ), impact networks (Meyskens, Robb‐Post, Stamp, Carsrud, & Reynolds, ), and social business incubators (Sonne, ).…”

Section: Introductionmentioning

confidence: 99%

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What do venture philanthropy organisations seek in social enterprises?

2019

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Venture philanthropy organisations (VPOs) help social enterprises (SEs) to achieve social impact and economic sustainability. This paper aims at explaining why VPOs invest in SEs and how they select their investments. It is based on the case study of an international VPO: danone.communities. Our findings show that VPOs provide SEs with financial and nonfinancial support to tackle social challenges. In return, they acquire knowledge and improve their reputation. We discuss three main factors that VPOs seek when selecting their investments in SEs: the social value proposition of the SE, key resources and processes of both SE and VPO, and the synergies between them. Finally, we propose some criteria to assess such partnerships.

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How impact investing funds invest in social‐purpose organizations: A cross‐country comparison

Borrello,

Bengo,

Moran

2023

Corp Soc Responsibility Env

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Impact investing funds (IIFs) are a type of investment fund that aims to achieve both financial and social goals, and they have become a valuable resource for social purpose organizations (SPOs) seeking capital. Our research evaluates the investment process by comparing approaches in two countries, Italy and Australia. We conducted semi‐structured interviews with 9 IIFs and 12 SPOs and used the Gioia Methodology to conduct the data analysis. We found both similar features and divergences. The investing process by IIFs in Australia is conservative, more risk averse and more profit‐oriented with a predominant “finance‐first” strategy. By contrast, in Italy there is a clear preference for “impact‐led” investment. We argue this illustrates a fundamental difference in investment philosophy and that IIFs in the two countries navigate, interpret, and understand the field of impact investment in contrasting ways. Finally, we contribute to the growing literature on impact investing by putting forward an “ideal” impact investment process that respects the integrity and peculiarities of the Social Impact Investment approach.

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

Abstract: covenants, social entrepreneurship, socially responsible investment, stewardship, trust, venture capital, venture philanthropy,

Cited by 66 publications

References 83 publications

Social Enterprises as Hybrid Organizations: A Review and Research Agenda

Social Enterprises as Hybrid Organizations: A Review and Research Agenda

What do venture philanthropy organisations seek in social enterprises?

How impact investing funds invest in social‐purpose organizations: A cross‐country comparison

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