Return on investment means different things to different people, especially when in terms of outcomes, and Impact Investment Group (IIG) is rewriting the rules in terms of the success of its investments.
IIG is best known to the startup sector for its VC investment arm, the Giant Leap Fund, launched in 2016. It’s an impact VC fund, designed to deliver measurable social and environmental outcomes alongside returns for investors. In August it launched the Impact Angel Network – angel investors with a special focus on impact startups.
Danny Almagor and Berry Liberman’s Melbourne-based IIG has now taken that a step further, developing an Australian-first loan scheme, where the measured impact reduces the outstanding total debt.
They’ve called it BOLD (Beneficial Outcomes Linked Debt) and IIG CEO Daniel Madhavan (pictured above) said it game-changer for businesses making the world a better place.
“It’s an Australian first program that creates a firm financial incentive for all companies creating positive change, and crucially, measuring it,” he said.
The loan scheme targets entrepreneurs and early-stage businesses and also manages repayments as a percentage of the company’s revenue rather than a lump monthly sum. Madhavan wanted its design to be less burdensome and administrative than a typical government or philanthropic grant application.
“This service caters to a firm gap in the market. Not all companies qualify for traditional venture capital impact funding as they aren’t scalable. But that doesn’t mean they aren’t worthy of funding or support,” Madhavan said.
IIG has already issued its first BOLD loan to Xceptional, a company that finds tech-based employment for people on the autism spectrum.
The first BOLD loans went to Xceptional, an IT recruitment firm, for people with neurodiverse conditions such as autism. The startup received $600,000 in BOLD lending and Xceptional’s loan balance will be reduced by both cash repayments, and the number of people they place in jobs.
In addition to IIG, the BOLD loan scheme is backed by Tripple, the Community Impact Foundation, the Disability Impact Fund and the Snow Foundation.