It is essential that the fundraiser and the investee company using the funds agree that the investment is strategically focused on generating an “impact”. In other words, impact investing requires the investor to understand the strategy of making impact and even to guide the strategy. The investor conducts its activities to make an impact and establishes the strategy upon this perspective. The investor’s decision includes a strategy that is integrated into every phase of the investment, from the beginning of feasibility studies until the time when the final impact measurement is done.
Such a strategy should be accurately and mutually agreed and committed by the investor who allocates funds to the company. This agreement also prepares the ground for the measurement and declaration of non-financial key performance indicators.
In order to use impact investing more effectively and to make a paradigm shift from classic investment to impact investing, there has to be a strategic agreement between the investor and the company, and beyond their commitment a collaboration with other companies, governmental institutions and universities is crucial in terms of communicating impact investing as an investment model.
