Educational Objectives

The Field Course: Investing for Impact seeks to help students understand why certain business founders lack access to capital and whether small investments of $25,000 to $50,000 (made from an intermediary Donor Advised Fund) might help these businesses grow to deliver financial returns and measurable community impacts. Specifically, Investing for Impact will:

• Provide a hands-on experience in thinking about the financial, commercial, impact and operational diligence of small businesses.
• Provide hands-on experience with the investment process, from working with founders, negotiating with co-investors, presenting to an investment committee and moving into the mechanics of closing an investment.
• Help students understand the barriers in access to capital (financial, social and human) that have historically hindered small businesses led by under-represented founders in the Boston region, and nationally.
• Increase familiarity with and collaboration among HBS students and businesses in communities in and around Boston that they might not otherwise be familiar with.
• Learn about community development finance as a subset of a broader field of impact investing.

Course Content and Organization

The course primarily involves teams of 4-5 students conducting investment diligence on small businesses who are looking for flexible capital to scale their businesses. In partnership with Boston-area intermediaries (e.g. Boston Impact Initiative, Foundation for Business Equity, LEAF, Mill City Community Investments), teams will work to understand and make the investment case to an investment committee consisting of HBS alumni. Students may also provide advisory support for companies that have been supported with investments in prior years or portfolio companies of our intermediary partners.

Course Requirements and Grading

The final deliverables will be a due diligence plan to assess the business from a commercial, operational and impact perspective; a final investment memo that summarizes the diligence and recommends an investment (or not); a financial model that is the basis for informing the investment decision; and an impact plan that outlines how the business will deliver impact. The course grade will have the following components:

• Due Diligence Plan: 10%
• Investment Memo (with financial model and impact plan): 35%
• Investment Committee Presentation: 10%
• Class Participation: 35%
• Peer feedback from their project teams: 10%

Pre-Requisites

None

Cross-Registrants/Auditors

The course is only open to MBAs and Kennedy School of Government students enrolled in a joint MBA program.

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