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OPIC
I
MPACT
I
NVESTMENT
C
HECKLIST
OPIC developed a checklist to guide impact investors as they prepare applications for the
OPIC Impact Investment Call for Proposals. While meant for investors, the checklist can
provide guidelines to understand the process for promoting investment opportunities. The
checklist includes the following components:
•
General information
•
Investment strategy
•
Team and organization
•
Track record
•
Fundraising, OPIC financing and structure of the investment vehicle
Additional attachments available include:
•
Staffing matrix
•
Current Investment Pipeline
•
Track Record
www.opic.gov/impact-investment/checklist
TOURISM INVESTMENT & FINANCE
57
Seed investors nevertheless sift through many, many project proposals before they choose one
promising enough to invest their money. They know that most projects never get beyond project
definition. For example, feasibility studies often indicate that the proposed projects are not
financially viable, or the permitting process may be too costly or complex to complete, or a
community is too difficult to work with, or additional debt and equity required will never be
successfully secured. In such cases, seed monies would be lost.
To compensate for that risk, seed investors may require a significantly large ownership stake
based on the amount of seed capital provided. For example, a seed investor might require a 2%
ownership stake for every 1% of total equity invested during the project definition phase,
illustrated below:
Total seed capital required for project definition
$100,000
Total equity financing required for project development
$1,000,000
Ownership stake for seed investor
20%
Social or impact investors may not require compensation (an additional ownership stake or
return) for the additional risk assumed during project definition phase, as their primary metric in
evaluating investment opportunities is not typically a strict financial risk/reward calculation.
It is also possible to secure funding for components of the process, such as a feasibility study,
from government and non-governmental organizations that provide grants for project definition
studies, most typically on a matching basis (i.e., some initial seed money may still required).
In terms of funding investment promotion, it is often possible to conclude agreements with
investment promotion partners (discussed later) on a success-fee basis, i.e., the promoter is
only paid if the project is fully funded. This is a common approach to investment promotion and
typically based on a percentage of the total debt and equity financing secured. Those fees are
included in the estimate of total funding required for project implementation.
This approach also works with some service providers that contribute to the design process. For
example, many architectural firms base their fees on a percentage of total development costs,
rather than a fixed fee, and agree to complete initial site plans, floor plans, renderings, and
elevations (to be included in the investment prospectus) free of charge, or in exchange for
having out-of-pocket expenses reimbursed, to help secure project financing.
S
ITE AND
A
RCHITECTURAL
P
LANS
These plans likely require professional design services from landscape planners and architects.
As discussed, these services can sometimes be secured on a success-fee basis, where
planners and architects prepare drawings and renderings to promote investment (to give
potential investors a visual sense of the project) and get compensated after the project acquires
its funding.
TOURISM INVESTMENT & FINANCE
58
I
DENTIFY
P
OTENTIAL
S
OURCES OF
F
INANCING
This is covered at length in Unit 6.
P
REPARE
I
NVESTMENT
P
ROSPECTUS
This document is the primary investment promotion tool to obtain equity financing for project
implementation. It is, in essence, an executive summary of the feasibility study supplemented
with site plans, architectural renderings, photographs, and project objectives such as
environmental conservation, creation of alternative livelihoods, cultural preservation, etc.
The components or table of contents of the investment prospectus will be tailored to the project.
The core components generally include
•
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