Cover -- Title Page -- Copyright -- Contents -- Preface -- Acknowledgments -- Chapter 1 Introduction to Impact Investing -- What is an Impact Investment? -- Who Makes Impact Investments? -- How This Book is Designed -- Sourcing and Screening -- Investment Analysis and Valuation -- Due Diligence and Investment Structuring -- Term Sheet and Documentation -- Building Value to Exit -- Private Equity Funds -- Impact Investment Evolution -- Notes From the Field -- What This Book is Not -- Setting Forth -- Chapter 2 Sourcing and Screening -- Sourcing Strategy -- Geographic Analysis -- Data Sets -- Data Aggregation and Weighting -- Controlling the Analysis -- Results -- Country Economic Analysis -- Business Cycle -- Foreign Exchange Risk -- Beyond Geography and Economics -- Sourcing for Impact -- Screening Questions -- Screening for Social Impact through a Social Impact Map -- Screening Business Strategy and Operations -- Screening the Current Investment Round -- A Look at Three Potential Investments -- Prospective Investment 1: Mobile Money (PagaPago) -- Prospective Investment 2: Micro Solar Energy (Solero Lighting) -- Prospective Investment 3: Healthcare (Mtoto Clinics) -- Moving Forward with an Investment -- Concluding Thoughts on Sourcing and Screening -- Chapter 3 Investment Analysis and Valuation -- Information Exchange -- Nondisclosure Agreement -- Desktop Due Diligence: Financial and Operating Information -- Solero Bottom-Up Analysis -- Pricing Analysis -- Volume Analysis -- The Solero Projection Model -- Inputs: Setting the Model Up for Flexibility -- Globals -- Income Statement: Revenue and Cost Build -- Operating Expenditures (Opex) -- Capital Expenditures and Depreciation -- Working Capital -- Working Capital Timing and the Cash Conversion Cycle -- Long-term Funding: Debt -- Finalizing the Income Statement.

Overall Organization and Functionality of the Income Statement and Balance Sheet -- The Cash Flow Statement -- Valuation: Discounted Free Cash Flow -- Terminal Value -- The Cost of Capital -- Risk-Free Rate -- Market Risk Premium -- Beta -- Country Risk -- Size -- Control Premium -- The Cost of Debt -- The Weighted Average Cost of Capital (WACC) -- The Discounting Process -- FCFF vs. FCFE -- Relative Valuation and Comparable Company Analysis -- Selecting a Peer Group -- Solero's Peer Group -- Valuation Multiples -- Using Multiples for Valuation -- Internal Rate of Return and Money Multiple -- Triangulating a Value -- Desktop Due Diligence: Social Impact Mapping -- Step 1: Mission -- Step 2: Social/Environmental Goals -- Step 3: Inputs -- Step 4: Activities -- Step 5: Output -- Step 6: Outcomes -- Step 7: Impact -- Continuing the Investment Process -- Chapter 4 Due Diligence and Investment Structuring -- Due Diligence -- Management Meetings -- Existing Investor Meetings -- Board of Directors Meetings and Corporate Governance -- Following the Value Chain -- Specialized Due Diligence for Social Impact Validation and Analysis: Stakeholder Analysis -- Due Diligence by Others: Engaging Independent Consultants -- Utilizing Due Diligence Information -- Increased Costs -- Distribution System Risks -- Corporate Management Risks -- Market-Based Risks -- Liquidation Preferences -- Creating an Investor Base and Downside Case -- Bridging Potential Valuation Gaps with Convertible Debt Structures -- Agreeing to Terms -- Chapter 5 The Term Sheet and Definitive Documentation -- The Term Sheet -- Overview of a Term Sheet -- Definitions -- Transaction Details -- Protective Clauses for Shareholders -- Protective Clauses for Boards of Directors -- Conditions Precedent and Subsequent -- Board Composition and Governance -- Purchase, Sale, and Conversion Rights.

Founder/Management Restrictions -- Anti-Dilution -- Up Round -- Down Round, Broad-Based Weighted Average Anti-Dilution Rights -- Down Round, Narrow-Based Weighted Average Anti-Dilution Rights -- Down Round, Ratchet-Based Anti-Dilution Rights -- Down Round, No Anti-Dilution Rights -- Understanding the Dynamics of Anti-Dilution Rights -- Right of First Refusal/Right of First Offer -- Tag-along Rights -- Drag-along Rights -- Liquidation Preference -- Redemption/Buy Back/Put Options -- Exit Option-QIPO -- Voting Rights -- Information Rights -- Inspection Rights -- Representations and Warranties -- Confidentiality -- Exclusivity -- Expenses -- Amendment -- Governing Law and Arbitration -- Legally Binding Clauses -- Definitive Documentation: The Subscription Agreement -- Definitive Documentation: The Shareholders' Agreement -- Finalizing the Investment -- Chapter 6 Post-Investment Monitoring, Management, and Value Building -- Reporting and Monitoring -- Establishing Reporting Requirements -- Common Reporting Metrics -- Financial Metrics -- Operational Metrics -- Solero's Example Impact Reporting Framework -- Post-Investment Case Studies -- Natural Gas in East Asia -- Cafés in South America -- Biogas Energy in Indonesia -- Methods of Exit -- Secondary Share Sale -- Acquisition -- IPOs -- Liquidating Structures -- The end of the Investment Process -- Chapter 7 Impact Investing Funds -- Private Equity or Venture Capital? -- The Basic Construct of a Private Equity Fund -- The Economics of a Private Equity Fund -- Private Equity Fund Model Overview -- How Traditional Funds Are Measured for Success -- Key Considerations in Fund Economics -- Expected Asset Performance -- Exit Timing -- Fund Placement Timing -- Resource Allocation -- Operational Expenses -- The Differences Between Traditional Funds and Impact Investing Funds -- Impact-Based Compensation Structures.

Benchmarking -- Concluding Thoughts on Impact Investing Funds -- Chapter 8 Investment Alternatives, Challenges, and Outlook -- Investment Alternatives -- Debt -- Receivables Financing / Factoring -- Credit Guarantees -- Grants -- Impact Investing Challenges -- How Valuation Bubbles Can Be Created -- An Issue of Scale -- Suitability -- Impact Investing Outlook -- About the Companion Website -- About the Authors -- Index -- EULA.