Impact Investment: A Practical Guide to Investment Process and Social Impact Analysis

Preface

Lebanon is a beautiful country, with picture-perfect coastlines, lively cities, and, unfortunately, abject poverty in many regions. It was there, in Beirut, that my venture into impact investing began. I was conducting a pro-bono workshop on credit risk, for local microfinance analysts that were supported by the charity Relief International. On the Israeli border towns I took my first onsite visits to clients who received loans and observed how they utilized the funding to operate and expand their businesses. I was truly impressed with the effect the funding had, as I was able to see real businesses in expansion.

At that time in my career, I had just left banking at Citigroup and was still primarily engaged in private-sector finance. I thought critically about that trip, though, and questioned whether I should make impact investing my full-time effort. I hesitated because of prior experience with nonprofit entities that operated very inefficiently. I also struggled finding clarity on whether my experience and skill set were best utilized in existing impact investing organizations. For years, I maintained my private-sector focus, but furthered my work with Relief International, consulting on microfinance capital market's issuances, and eventually joining its board of directors.

I persisted with traditional finance and combined my prior securitization experience with early-stage company analysis to work on venture debt transactions. As I learned more about venture company ...