1. Your social enterprise needs capital. What sources of financing are potentially available? Is money fungible, or do the characteristics of the investor/financial intermediary make a difference?
2. Investment intermediaries can add serious value…or suck up valuable management time. If you are granting a Board seat to an investor, will they make a commitment to attend a majority of meetings? How engaged will they be in providing strategic support to your company and what form(s) will this engagement take?
3. Finance is driven by numbers and regulation; innovation is rarely encouraged. Finding a creative financier can mean the difference between seeing your non-profit bank proposal emerge as the vibrant BancoSol, or getting stuck with debt service levels that hinder your next phase of growth.
4. Your company and your investment intermediary need to produce regular and compelling integrated reports. Social enterprises and #impactinv investors alike need to understand and share their financial and non-financial performance data. Ideally, these impact indicators will reveal trends and strategic opportunities. Agreeing ex-ante on what can and should be achieved, and which goals are measurable, can prevent headaches down the road. Irrational exuberance for understanding impact carries financial costs and ethical implications. An intermediary that differentiates between short-term impact indicators and longitudinal analysis will look for practical, rather than perfect, impact reporting solutions. Beware of those who think back office is a “no-brainer” – those reports have to come from somewhere!
5. Governance matters – and for ethical/responsible investors, it matters in real and practical ways. Good intermediaries reinforce appropriate governance. Your garden variety profit-maximizer, however, may not always act in accordance with “multiple bottom line” thinking.