Innovations in Financing Structures for Impact Enterprises: Spotlight on Latin America: Summary
Armeni, Andrea; Ferreyra de Bone, Miguel
Typical financing structures based on debt or equity are often inappropriate for early-stage impact enterprises. Due to potential conflicts between the investor's expectations of returns and the entrepreneur's commitment to their mission, impact entrepreneurs have a difficult time securing the right kind of capital for their specific needs. As a result, many fail to get off the ground due to this capital gap. Commissioned by the Multilateral Investment Fund with support from the Rockefeller Foundation, this summary of Transform Finance's upcoming report provides an overview of the specific problems with traditional financing structures, the innovations happening now in investment funds and deal structures to alleviate the capital gap, and recommendations for how fund managers, investors, and entrepreneurs can engage with these alternatives to increase their impact.