EXPLORING THE INTERSECTION OF IMPACT INVESTING AND SOCIAL START-UPS IN LATIN AMERICA

This study provides an overview of the intersection between social start-ups, mainly technology-based, and impact investing, and their role in the creation and development of solutions with social and environmental impact in Latin America. The momentum of entrepreneurship in this region of emerging economies has opened the space to contribute to sustainable development, specifically by creating jobs and driving economic growth and innovation, improving social conditions and contributing to addressing environmental challenges (UN Economic and Social Council). In a social start-up, access to capital and resources is not easy given its level of uncertainty and novelty. In recent years there has been a gap in the development of impact capital providers in some stages of social entrepreneurship. Therefore, this study has focused on exploring the public and private initiatives, motivations, challenges, and outcomes that impact investors have been developing in relation to the support and funding they have provided to social start-ups in recent years. The thesis has adopted a qualitative method design, which has provided valuable insights into the dynamics and types of measures used by venture capital funds in impact investment schemes in social start-ups. Through a group of representatives from the impact investing sector who are involved in investments in social start-ups, it will be possible to validate whether the data gathered from the literature can be applied in the same way in ventures in the region. Since the relationship between impact investing and social start-ups has recently emerged, we will study how venture capital fund managers measure the performance of their investments in social start-ups in Latin America. The dissertation is structured around a comprehensive review of the current landscape of impact investing and social start-ups in the region, emphasising the metrics and types of measurements that investors are using to understand the performance of their impact investments in social start-ups. Due to the complexity of data collection and the recent development of impact investing in social start-ups, it is difficult to accurately estimate whether the results are truly successful, however through this study it is possible to understand the current challenges and motivations behind the relationship between impact investments and social start-ups in Latin America.