Impak Finance (A): Building the Impact Economy through Systems Change
(9 pages of text)
The founder and chief executive officer of impak Finance Inc. had grown his financial technology start-up, based in Montreal, Canada, into a company with two main business lines: an extensive and comprehensive assessment and rating agency that used advanced social impact measurement and scoring software, and an online marketplace platform that used the cryptocurrency impak Coin and connected like-minded consumers, investors, and businesses to support socially sustainable and responsible firms aligned on their economic and financial principles. In case A, after the outbreak of the COVID-19 pandemic in early 2020, the founder wondered which strategic direction he should take to ensure the long-term sustainability of impak Finance Inc.—invest heavily in developing the rating agency or grow the impak marketplace?
This case is designed for use in undergraduate- and graduate-level courses on sustainability, finance, social and environmental accounting, technology and innovation, strategy, entrepreneurship, leadership, or economics. Students should have strong strategic analytical skills to ensure they understand the company's business model and goals, and recognize the opportunities available in a chaotic and suboptimal situation for business. Students will learn about business management decision-making by applying qualitative, social, environmental, and quantitative criteria. They will review concepts such as social enterprises, impact investing, and social impact–rating standards. They will also discuss how social enterprises measure performance and whether trade-offs exist between social and financial returns (and if so, to what extent). They will learn how investors might struggle to find a balance between doing well and turning a profit. Specifically, after working through the cases and assignment questions, students will be able to
- define a social enterprise;
- describe the emerging field of the impact economy;
- understand overall impact rating and assessments for businesses, including some experts’ belief that impact assessments will be performed and disclosed as regularly and candidly as financial reports;
- evaluate an entrepreneur's strategic opportunities, and make and support a decision to help the business succeed; and
- understand the effects of an exogenous economic shock on businesses—especially start-ups—and recognize the opportunities that can arise in a struggle.
Finance and Insurance
Canada, Small, 2020
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