The document discusses the rise of alternative finance and impact investing, emphasizing its potential to democratize access to finance and create both financial returns and positive social or environmental impacts. It highlights the growth of crowdfunding and the need for innovative funding models to support social enterprises. Key figures in the field stress that impact investing may soon go mainstream and bring transformative opportunities for social improvement.

1. Financing Innovation including Research
“Show Me The Money”
Professor Alan Barrell, Dr Andrea Marmalejo – September 2015
Alternative Finance and Impact Investment

2. The Developing World of Enterprise Finance “Alternative
Finance”
§ Impact of the Internet and Social Networks
§A NEW world of communication and interaction
§More “power to the people”
§Impact of Innovation and Entrepreneurship
§Failures of Western Banking System
§Crowd Funding including Peer to Peer Lending
§“Collaborative Capitalism”
§Microfinance
§“Impact Investing”
§Is it “A Brave NEW WORLD!”?
Some speak of “The Democratisation of
access to Finance”

5. What
IS
Alternative
Finance?
Democratising
Access
to
Finance
IMPACT INVESTING
Seeking to create both financial return and
positive social or environmental impact
which is actively measured.

6. Phenomenal
Growth
in
Alternative
Finance
– Accelerating
on
all
fronts
Alternative
Finance
in
the
last
year
has
been
as
much
as
in
the
previous
three
years
in
the
UK
-­‐ NESTA
Report
November
2014

8. Courtesy
World
Bank
2013
But
we
have
Revolutionary
Potential
!
Crowdfunding
could
see
an
180%
increase
in
available
capital
by
2025!
That
would
be
US$
93
billions
for
Crowdfunding
Investments
WOW!

9. New Model: Total Value & Impact
“Impact investing is an investment approach that intentionally
seeks to create both financial return and positive social or
environmental impact that is actively measured.”
• “It is an investment approach and not [just] an asset class…”
• “Intentionality matters”
• “…the outcomes of impact investing, including both the financial return and the
social and environmental impact, are actively measured.” -­ WEF, Impact Investing Report
2013

10. Impact Investing
Snapshot of a Tipping Point
The question is not if impact investing will go mainstream
– but when;; who will lead;; and what will the ‘impact’ be –
what benefit and for whom?
“The early days of venture capital remind me very much
about today. There is change in the air.
People want to do meaningful things – not just financial.
The world can’t continue to function as it is now.”
-­Sir Ronald Cohen, Chairman, G8 Social Investment Impact Taskforce;;
Founder and Chairman, Big Society Capital

11. Old Model: Capital Divide
Market-Oriented
Social Ventures
Philanthropic
& Development
Traditional
Capital &
Ventures
Challenge & Massive Opportunity
“Just as the formation of the venture
capital industry ushered a new
approach and mindset toward
funding innovation within the private
sector, impact investment has
started to bring opportunities to
harness entrepreneurship and
capital markets to drive social
improvement.”
– Sir Ronald Cohen & William A. Sahlman;;
Harvard Business Review, Blog Jan., 2013
•Annual U.S. Philanthropy: $350M
•US-­EU Foundation Corpus: $700B
•Global AUM: $120 trillion +

12. New Model: Unblocked Divides
Networks -­ disconnected
Knowledge/best practices – limited
Capital supply -­ fragmented
BlockPhilanthropic
Capital
Private
Capital
Entrepreneurs &
Social Change
“The biggest obstacle to scale for the social sector is this
lack of effective funding models.” – Cohen & Salman
Impact Investing

13. Social Enterprise Market Opportunities
TA TA TATA T
A
Grant
Venture
Philanthropy
Early Stage
Impact Fund
VCF 1 VCF 2
Impact Investors
The level of financial return and social impact will
determine the type of investor that a SE can access

14. Impact investors expand across profit first / impact
first deriving funding from traditional investors or
traditional donors
Impact
Esmee
Fairbairn
Omidyar
Financial
Return
Venturesom
e
LGT
GBF
Oxfam
DOB
DOEN
ResponsAbi
lity
Sainsbury’s
Foundation
E+Co
SEAF
Bridges
Ventures
Acumen
Other key differentiating
variables: size of
investment and time
horizon / liquidity

15. GIFF
• Healthcare and Wellbeing
• Environmental Protection
• Emerging middle classes, and the billions of people in
under-­served populations at the ‘Bottom of the Pyramid”
Global Impact Fund of Funds (GIFF) targets high growth
high impact areas
Sustainable investments:
Beg. 2012: $13.3T
Beg. 2014: $21.4T
% of global AUM:
21.5%
30.2%

16. Thank You for Listening
alan@alanbarrell.com
andrea@amarmolejo.com
www.alanbarrell.com