KEY TERMS

What is Blended Finance?

BLENDED FINANCE “is the strategic use of development finance and philanthropic funds to mobilise private capital flows to emerging and frontier markets.” (WEF/OECD)

What is an Impact Enterprise?

The term IMPACT ENTERPRISE refers to enterprises with business models that deliver social and/or environmental impact in a financially self-sustainable manner.

What are Incubators?

INCUBATORS are organisations, including accelerators and individual consultant service providers, that offer programmes for entrepreneurs. These programmes may include seed investment, connections, mentorship, and educational components. These programmes are typically selective and time-limited, recruiting cohorts of entrepreneurs at regular intervals. Accelerators and incubators are essentially the same, with the difference being that incubators specifically cater to early-stage enterprises that have recently been established (start-ups), while accelerators target more mature enterprises and help them accelerate their growth. 

What is an Impact Investment?

IMPACT INVESTMENTS are “investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.” (The Global Impact Investment Network, GIIN). In addition to financial returns, the investment needs to demonstrate positive impact as well.

What is Impact Measurement & Management (IMM)?

IMPACT MEASUREMENT & MANAGEMENT is similar to the financial management of a business but with a focus on measuring and improving the impact that the business has on its customers, suppliers, employees, society, and the environment. It involves assessing and managing the social and environmental effects of a company’s operations.  

What is (Impact) Investment Readiness?

INVESTMENT READINESS refers to a company’s preparedness to receive (private) investment. This typically involves having a business model and financial plan that are geared towards profitability. For enterprises seeking impact investment, it includes having a credible theory of change and analysis of the intended impact (see impact management). In such a case, we call it IMPACT INVESTMENT READINESS.

 

What are Social Impact Incentives (SIINC)?

SOCIAL IMPACT INCENTIVES are a funding instrument that rewards impact enterprises with time-limited premium payments for achieving social impact. The additional revenues enable them to improve profitability and attract investment to scale. For details please see https://www.roots-of-impact.org/siinc/  SIINC was co-created by Roots of Impact and SDC.

What are Angel Investors?

ANGEL INVESTORS (also known as BUSINESS ANGELS, INFORMAL INVESTORS, ANGEL FUNDERS, PRIVATE INVESTORS or SEED INVESTORS) are wealthy individuals who provide capital for a business start-up, usually in exchange for convertible debt or ownership equity.