But at least one institutional funding source understands the value provided by impact investments: Impact Small Business Investment Companies, or SBICs.
The structure works like this: usually, they are limited partnerships with an SBIC manager acting as a general partner. The limited partners are typically institutional investors or people with a high net worth and will invest between $1 million and $10 million in each small business.
Some of the most successful businesses in the country received financing through SBICs before they made it big, such as Apple, Staples and Restoration Hardware.
You can also look to the Impact SBICs, a subset of the traditional SBIC program, to maximize the financial return to investors - but also generate a measureable social, environmental or economic impact.
The SBA impact program was designed to more broadly help America’s impact-investing industry build up the track record and standards it needs to attract capital, and also prove that the market-rate returns and social, environmental, or economic impact can happen at the same time.
Like the traditional kind, Impact SBICs are for qualifying U.S. businesses, but they make a commitment to use at least 50 percent of their capital on impact investments.
So, if you’re a social entrepreneur: don’t fret. There are options out there and a structure set up that can help you secure investors.
Learn more at SBA's website and check out the directory of Impact SBICs here.
To continue the conversation, join me and other professionals interested in sustainability at the annual SILC conference on May 17, 2017 at The New York City Bar Association.