1. CAF Venturesome – Impact Investing Paul Cheng Senior Investment Manager, CAF Venturesome The text in this document may be reproduced free of charge providing that it is reproduced accurately and not used in a misleading context. The material must be acknowledged as Venturesome copyright and the title of the document specified.

2. Leading UK impact investor

3. Emerging industry – but still fragile

4. Finance-first vs Impact-first

5. The social investment market: risk / return Low Financial Risk Philanthropy Impact Investment Property / working capital Development capital Commercial returns VS Bridging Fund VS Development Fund Classical grant making (-100%) Reduced financial return compensated by social impact High Financial Risk Loss of capital compensated by social impact Giving Multiplier

6. The investor universe + 8%

7. The investor universe + 8% Market-rate return

8. The investor universe + 8% 0% Market-rate return

9. The investor universe + 8% 0% Market-rate return Capital-protected

10. The investor universe - 100% + 8% 0% Capital-protected Market-rate return

11. The investor universe - 100% + 8% 0% Capital-protected Market-rate return Grant-makers

12. The investor universe - 100% + 8% 0% Capital-protected Market-rate return Grant-makers - 15%

13. The investor universe - 100% + 8% 0% Capital-protected Market-rate return Grant-makers - 15% ?

15. Philanthropic equity vs Revenue funding

20. Life cycle of an organisation

21. Matching financial mechanisms to funding needs

22. Matching financial mechanisms to funding needs Secured loan Standby Facility Overdraft Unsecured Loan Patient Capital Quasi-equity Equity Grant HIGH CHANCE OF REPAYMENT LOW CHANCE OF REPAYMENT

23. Matching financial mechanisms to funding needs Secured loan Standby Facility Overdraft Unsecured Loan Patient Capital Quasi-equity Equity Grant HIGH CHANCE OF REPAYMENT LOW CHANCE OF REPAYMENT LOW RISK HIGH RISK Property/Asset purchase (mortgage) Cashflow bridging Pre-funding Capital Fundraising Higher risk working capital Development Capital

24. Matching financial mechanisms to funding needs Secured loan Standby Facility Overdraft Unsecured Loan Patient Capital Quasi-equity Equity Grant HIGH CHANCE OF REPAYMENT LOW CHANCE OF REPAYMENT LOW RISK HIGH RISK Property/Asset purchase (mortgage) Cashflow bridging Pre-funding Capital Fundraising Higher risk working capital) Development Capital

25. Matching financial mechanisms to funding needs Unsecured Loan Overdraft Quasi-equity Equity Grant Pre-funding capital fundraising Higher risk working capital Development capital Standby Facility LOW RISK HIGHRISK Property/Asset purchase (mortgage) Appropriate Funding (correlation) Patient Capital Secured loan Cashflow bridging LOW CHANCE OF REPAYMENT HIGH CHANCE OF REPAYMENT

26. Charity or business?

30. Contact details: Paul Cheng [email_address] 03000 123 256 www.venturesome.org Twitter: @cafventuresome