A Stack starts as risk-heavy for the investors and cost-light for the business. As the business evolution progresses, so the risk migrates to the business and the costs increase to eventually reach commercial terms – Graduation!
Building and Graduating a Blended Finance Stack via
4 Categories of investment instruments
This risk-sharing instrument will be our first use, targeting capital reservation or capital plus a very small annual
When the business is seen as able to provide a yield or to service debt costs, debt will be used to “graduate” equity out
of the stack. Debt will initially be introduced as interest-free, graduating to low yield bonds and low interest term as the
Philanthropic contributions or even some impact investor funds will primarily be used as performance incentives but may also be used as business accelerants for slow-to-perform investments.
The major risks of first loss and forex shift exert a disproportionate impact on the risk-rating and therefor the costs of investments. Philanthropic capital will be used by Health 4 Development to provide risk pool funding across the portfolio.
Our Solution-Driven Strategy
Delivering on Value