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How do impact investors evaluate an investee social enterprise? A framework of impact investing process

Anirudh Agrawal (OP Jindal Global University, Sonipat, India)
Kristjan Jespersen (Department of Management, Society and Communication, Copenhagen Business School, Frederiksberg, Denmark)

Journal of Entrepreneurship in Emerging Economies

ISSN: 2053-4604

Article publication date: 25 January 2023




Impact investors differ from venture capital firms as they invest to create social and commercial value. This paper pursues the question: how do impact investors select social enterprises? The aim of this study is to understand the selection and investing process of impact investors.


This study developed a database of 115 impact-investing firms across different geographies. Emails were sent to investors associated with each of the impact-investing firms found in the database, out of which 32 replied with consent for a telephonic or in-person interview.


The significant findings presented in the paper are the following. First, this study shows the impact-investing selection process model. The four major steps in the selection process are context, investment focus, venture analysis and decision. In each step, social values and missions become the defining characteristics of the selection process. Second, the findings also discuss the typologies of impact investors as a function of their selection approaches.

Practical implications

This paper discusses the impact investing strategy among social enterprises. It provides a framework for impact investing among investee social enterprises. As an impact investing professional, one learns investment strategy through this paper.

Social implications

Impact investing is a growing field. It is believed that impact investing could greatly impact sustainable development goals, climate change goals and help in inclusive development. This study helps to further understand impact investing process and hopes to help social enterprises and impact investors make a better match, thereby, creating a greater overall social and environmental impact.


This study helps both practitioners and academics to understand the complexity of impact investing. This study helps develop heuristics that impact investors may use to make investments. This study provides a framework for investing, which the impact investing firms may use to invest.



The authors would like to acknowledge the financial and non-financial support provided by the Copenhagen Business School.


Agrawal, A. and Jespersen, K. (2023), "How do impact investors evaluate an investee social enterprise? A framework of impact investing process", Journal of Entrepreneurship in Emerging Economies, Vol. ahead-of-print No. ahead-of-print.



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