A free curated library of innovations in impact investing terms and investment structures, available to entrepreneurs, investors and impact professionals

Impact Terms offers:

  • a platform for newcomers to impact enterprises to learn and evaluate structures;
  • a forum to build investor/investee consensus around “neutral” terms; and
  • a platform for experts to share their innovations, best practices and experience.

Barron’s published an article on Revenue Based Finance and how companies that used these structures were better able to manage the downturn from Covid-19

Latest Content

Stakeholders vs. Shareholders

The terms shareholder and stakeholder can oftentimes be confused or improperly used interchangeably. Every business has shareholders and stakeholders, both of which are essential to the success of a business,…

Catalytic Capital

In essence, catalytic capital is investment capital (debt, equity, guarantees, etc) with which the investor accepts reduced financial expectations in order to bring about a greater social or environmental impact. …

Social Enterprise

A social enterprise is typically understood to be a for-profit business or a business within a non-profit organization that has a specific social or environmental mission included in the business…

Stock Transfer Restrictions

Investors and founders may agree to restrictions preventing the transfer of shares to buyers deemed not to be aligned with the company’s mission. This provision goes beyond the traditional right…

Impact Oversight

The company’s board of directors can empower a committee or director to oversee mission-related decisions. But there are limits to a board’s ability to delegate its authority, so oversight clauses…

Protecting Voting Rights

Investor preferred stock generally requires that the company secure the approval of the preferred stockholders to take certain actions. The parties could agree to expand the traditional list of approval…

Drag-Along Rights

Conventionally, drag-along rights are used to facilitate the sale of companies. With conventional drag-along provisions, shareholders agree in advance that they will vote in favor of a sale transaction that…

Protective Provisions

Protective provisions are one of the special rights negotiated by investors participating in a company’s preferred stock financing. Protective provisions give preferred stockholders in a company consent rights with respect…

Steward Ownership

Steward-ownership refers to a set of legal structures that instill two core principles into the legal DNA of a business: self-governance and profits serve purpose. These structures ensure that control…

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