The mosaic of the impact investment ecosystem

Impact investing is a concept on the rise. On the one hand, we have entrepreneurs who want to solve social problems using a business logic, with or without profit. On the other hand, we have investors and organizations with capital available to contribute to these innovative initiatives, who may or may not need to share the financial results.

Within this context, Impact Hub São Paulo mediated a panel to discuss the theme and invited SITAWI to talk about its experience in the sector. Daniel Izzo (Vox Capital), Rodrigo Menezes (Derraik & Menezes Advogados) and Frederico Rizzo (Broota Brasil) were the co-panelists who, together with Itali Collini (SITAWI Finance for Good), discussed their role in the mosaic of investment in impact businesses.

WhatsApp Image 2017-09-04 at 21.35.01Itali Collini, a Social Finance analyst at SITAWI, commented on the financial mechanisms developed by the organization. SITAWI offers capital through social and environmental loans, guarantees and convertible debt to nonprofit and for profit impact businesses. These mechanisms are characterized by lower interest rates, a grace period for loans and a more humanized system of monitoring and support for enterprises and their impact. This differentiated positioning of SITAWI aims to make capital more patient, abundant, and cheap for organizations that generate positive social and environmental impact in Brazil.

“It’s important that people understand that not all impact businesses are scalable or have the required structure to receive venture capital contributions. There are businesses that prioritize an in-depth impact rather than expansion, for example, and this is not bad, nor should it be overlooked. SITAWI’s position and financial vehicles allow it to serve a middle range of impact businesses and often also allows them to survive until they have the structure to receive an equity investment”, said Itali Collini.

Collini also stressed the need to spread the information, as entrepreneurs are not always aware of the various mechanisms available to support their initiatives.

“The importance of our participation in this ecosystem became evident to me when entrepreneurs approached me at the end [of the event] saying two things: that they did not know these options existed; and that they didn’t want an equity partner at the moment, but rather a more patient form of capital similar to what SITAWI offers, she concluded.

According to Luciana Brasil, the marketing director of Impact Hub São Paulo, the event aims to provide a space for exchanging ideas, and to connect initiatives, people and companies with the theme of social innovation. She believes in the potential of the mosaic of impact investment.

“The opportunities in this area are already significant, given its relatively recent emergence in Brazil. We are optimistic that the inovation will become a part of the economic and social environment of the country. If we use the  UN SDGs as a benchmark, we will have a sustainable future”, commented Luciana.