INNOVATIVE FINANCE TOOLKIT
Be inspired about innovative ways to finance impact enterprises
Hot off the press: our Innovative Finance Toolkit!
Alternative Structures for Financing Early-Stage Impact Enterprises in Bangladesh
We need to redefine the terms of investments to better fit the unique attributes of impact enterprises — whether it be more patience, unconventional repayment options, or rewards for impact. In this toolkit, we want to highlight some of the alternative structures that can be used to support impact enterprises on their journey to create much-needed impact at scale. GET THE ENTIRE INNOVATIVE FINANCE TOOLKIT HERE or select individual instruments below. Here you’ll also find case studies and additional resources.
I. Equity Alternatives and Convertibles
SAFE (Simple Agreement for Future Equity)
Case Study: Y Combinator
Additional Resources: Y Combinator / NACO Canada / NLR SAFE And KISSes Next Gen of Startup Financing / Techcrunch Why SAFE Notes Are Not Safe for Entrepreneurs / Thomson Reuters SAFE
Convertible Note
Case Studies: Ledgy Convertible Notes Real world Examples
Additional Resources: Techcrunch Convertible Note Seed Financings / Seedinvest Convertible Notes Examples and How They Work / Seedinvest Convertible Notes
Revenue Share Agreement (equity based)
Case Studies: coming soon!
Additional Resources: Impact Terms Alternative Exits / Techcrunch Revenue-Based Investing / Impact Terms Revenue-Based Financing
II. Catalytic Impact-Linked Finance Instruments: Attracting Private Investment
SIINC (Social Impact Incentives)
Case Studies: SIINC Programs / SIINC Case Study Clínicas del Azúcar / HBI Mexican Clinic Boosts Low-Income Patients / Root Capital LaunchesFirst Pay-For-Impact Partnership
Additional Resources: SIINC White Paper / SIINC Explain Video & Graphs / Emergency SIINC / Devex Social Impact Incentives A New Tool for Supporting Impact / NextBillion Daring to Think Big Why It’s Time to Scale Impact-Linked Finance / NextBillion Pay-For-Success With An Important Twist
Reimbursable and Convertible SIINC
Description Reimbursable & Convertible SIINC
Case Studies: there are no case studies for this innovative instrument yet.
Additional Resources: SIINC Explain Video & Graphs / SIINC White Paper / Emergency SIINC / Devex Social Impact Incentives A New Tool for Supporting Impact / NextBillion Daring to Think Big Why It’s Time to Scale Impact-Linked Finance / NextBillion Pay-For-Success With An Important Twist
Impact-Ready Matching Fund (IRMF)
Case Studies: There are no case studies yet – the instrument will be used for the first time in the B-Briddhi programme
Additional Resources: IRMF page
III. Other Impact-Linked Finance Instruments
Impact-Linked Loan
Description Impact-Linked Loan
Case Studies: IIG BOLD Contract / BNP Paribas Close Landmark Positive Incentive Loan
Additional Resources: Impact-Linked Finance / Roots of Impact BCG Accelerating Impact-Linked Finance / Roots of Impact Acumen SDC Blueprint for An Outcomes Fund in Off-Grid Clean Energy
Impact-Linked Convertible Note
Description Impact-Linked Covertible Note
Case Studies: there are no case studies for this innovative instrument yet.
Additional Resources: Impact-Linked Finance
IV. Other Catalytic Funding Instruments: Attracting Additional Investment (Blended Finance)
(Partial) Guarantee
Case Studies: GIIN Guarantees in US Community Investing / GIIN FlexCAP / Sida
Additional Resources: Convergence Blending with Guarantees / Convergence Innovations in Guarantees for Development / World Bank Utilizing Partial Guarantees / Sida’s Guarantee Instrument
Subordinated Loans as Catalytic First-Loss Capital
Description Subordinated Loans (Catalytic)
Case Studies: PEAK II – Providing Unemployment and Knowledge in Tanzania / Community Finance Fund for Social Entrepreneurs (CFFSE) / California Freshwork Fund Term Debt Facility / Catalytic Capital Consortium / Convergence Watercredit Investment Fund
Additional Resources: GIIN Capalytic First Loss Capital / Tideline Catalytic Capital
V. Results-Based Finance Instruments for Non-Profit Organisations
Social/Development Impact Bond
Case Studies: Quality Education India DIB / Village Enterprise DIB / Colombia Workforce DIB / Peterborough SIB
Additional Resources: Government Outcomes Lab / CGD Social Finance Investing in Social Outcomes DIB / Brookings Convergence Impact Bonds in Developing Countries / SSIR DIBS There is Still No Free Lunch / OECD Understanding SIBs / Instiglio A Practitioners Guide to RBF
Performance-Based Contract
Description Performance-Based Contract
Case Studies: RBF Health PBC Case of Liberia / IDB PBC for NRW Reduction & Control Bahamas / World Bank Output Based Aid and Sustainable Sanitation / World Bank Maternal Child Health and Nutrition Project / XPRIZE Global Learning
Additional Resources: GPRBA / World Bank Use of PBC for Nonrevenue Water Reduction / Government Outcomes Lab PBC & RBF / World Bank RBF in Health / German Develoment Institute RBF / Beeck Center Funding for Results / USAID Pay For Results in Development / Norwegian Knowledge Center for Health Service Effects of RBF
