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

CHAPTER 6

Post-Investment Monitoring, Management, and Value Building

Sourcing, structuring, and finalizing the investment may have seemed like an exhaustive amount of work; however, that process represents a fraction of the lifespan of most impact investments. Post-investment an investor can take on a spectrum of responsibilities and involvement. Passive investors may want to only receive reports showing the progress management is making, while more active investors may establish a significant presence amongst the board of directors.

Passive or active, financial and social data reporting is usually the first key topic after the closing of the investment. A passive impact investor will want to see the growth of the company and the social value achieved. An active investor has the same desire to understand the current state and recent achievements of the company, but is also looking for indicators of problems. Beyond initial capital, seasoned active investors have the ability to spot trouble before small issues turn into severe company crippling predicaments.

With a reliable and informative reporting system set up, an investor then knows where to target efforts. Additionally, the investor has to work with the company to see where the investor's skills and experience are most useful to building financial and social mission success. Impact investors usually have the unique experience to assist in maintaining and improving the social mission as the company scales up. Other investors ...