Catalytic Capital: Unlocking More Investment and Impact

March 12, 2019 | A new Tideline report, supported by the MacArthur Foundation, explores ‘catalytic capital’ and the many ways it has been used by a variety of impact-oriented investors to fill financing gaps, enable third-party investment, and generate impact that would not otherwise be possible.

This work, titled Catalytic Capital: Unlocking More Investment and Impact, seeks to provide a broad overview of existing research on the topic and a foundation for existing and potential investors of catalytic capital to expand and improve upon their use of this important tool.

The report also introduces the Pathways to Impact framework, created to guide investors who deploy catalytic capital in a variety of contexts in clarifying the rationale for their catalytic investments:

The framework builds on the work of others to help investors articulate, on a consistent and comparable basis, the forms of risk or return concession included in the investment structure (e.g., a subordinated position or long/uncertain duration); the roles catalytic capital is expected to play in supporting the investee (e.g., seeding early-stage innovations or scaling impact business models); and the specific uses of that capital by the investee (e.g., building track record or leveraging additional investment).

A PDF download of the report is available here:

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