Demand Dividend: Creating Reliable Returns in Impact Investing
Demand Dividend is a debt vehicle designed to improve the repayment cycle for impact investors and ease capital access for social enterprises. Demand Dividend grew out of the need to find alternatives to debt, convertible debt, and equity as funding mechanisms for social enterprises. Demand Dividend has four key features:
- A structure designed to enable successful capital exit (a “round trip”)
- Payments linked to the enterprise’s ability to pay
- A return profile commensurate with investor risk in frontier enterprises
- Incentives to align investor and entrepreneur interests
Demand Dividend is designed to enable investors to generate a reliable, reasonable return while allowing social entrepreneurs to maintain control and efficiently deploy capital.
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