Impact investing has emerged in recent years as a high potential approach to long-term sustainable social and financial value creation. Although its basic business and investment theories do not differ substantially from that typical in established capital markets, there are unique and specific challenges to successful investment in social ventures.
This finance elective will provide a detailed introduction to this developing sector of impact investing, equipping students with vital, practitioner-focused skills in the following areas:
• Development of social impact business models and selection of appropriate entity type
• Techniques for capitalizing both for-profit and non-profit social ventures, including investment, grants and organic reinvestment approaches
• Assessment and measurement of impact, using a competitive advantage framework to compare social enterprises and determine best growth strategy
• Legal and governance strategies to preserve mission-focus throughout organizational scale
This course is suitable for students interested either in impact investing as an investor or in social enterprises as an entrepreneur. It is also suitable for students wishing to learn about the impact investing and social enterprise space in general. Course material is taught from the perspectives of the company and the investor over the full organizational lifecycle.
All students must possess strong financial skills and solid competence in Microsoft Excel. Experience of venture equity and debt financing methods is beneficial, but not essential. By the end of the course, students will have acquired understanding and skills in investment structuring for small and large enterprises, evaluating deal opportunities from financial and social returns perspectives, and structuring and operating impact investment funds.
John Walker was a Columbia Business School faculty member from 2012 to 2021.