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Financing Instruments and Transactions

In: Impact Investing

Author

Listed:
  • Wolfgang Spiess-Knafl

    (European Center for Social Finance)

  • Barbara Scheck

    (Munich Business School)

Abstract

This chapter discusses the financing instruments and transactions in the space for impact investments. This chapter will discuss the various financing instruments available to fund social sector organizations. Equity capital and debt capital are well-known examples. However, in this field there are also transactions based on mezzanine capital, recoverable grants, forgivable loans, convertible grants, revenue share agreements or grants. There also the questions which social enterprises are being financed. This chapter also takes a closer look at a sample of 342 transactions and shows the transactions sizes and the use of financing instruments. Interestingly, the characteristics of the investee also have an influence on the financing structures. This chapter closes with an analysis of exits. Investors need to have an exit option for their investments to recover their investments. It will take a look at exits in the ethical products space and also at acquisitions of social enterprises globally. At the moment, the field is still in an early phase and there are only a handful of precedent transactions available.

Suggested Citation

  • Wolfgang Spiess-Knafl & Barbara Scheck, 2023. "Financing Instruments and Transactions," Palgrave Studies in Impact Finance, in: Impact Investing, edition 2, chapter 0, pages 97-116, Palgrave Macmillan.
    • Handle: RePEc:pal:psifcp:978-3-031-32183-2_5
    DOI: 10.1007/978-3-031-32183-2_5
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