Assessing the Social and Financial Impact of an Investment

by: Gautam Kaul

Publication Date: November 25, 2020
Length: 14 pages
Product ID#: 1-383-543

Core Disciplines: Accounting/Finance, Entrepreneurship & Innovation, Information - Technology & Management, Social Impact, Strategy & Management

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Teaching Note

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In 2011, a due diligence team, made up of members of the Social Venture Fund (SVF) at the University of Michigan’s Ross School of Business, had completed its assessment of the innovative education startup LearnZillion, Inc. The team recommended investing in LearnZillion because doing so reasonably aimed to fulfill SVF’s dual priorities of positive and meaningful social impact, as well as feasible and significant financial returns.

Now, looking forward to 2012 and beyond, the major questions for SVF included how much to invest, how and when success in social impact could be measured, and what was the realistic yet ideal balance of priorities between social and financial impact results. Additionally, to what extent could a rigorous predictive analysis be done before finalizing the terms of investment?

Teaching Objectives

After reading and discussing the material, students should:

  • Assess the financial and social impact of LearnZillion, an innovative K-12 education technology startup.
  • Evaluate the financial and social impact of the investment made in LearnZillion by the Social Venture Fund (SVF) at the University of Michigan's Ross School of Business.
  • Examine the reasons for SVF’s ability to have a social impact relative to co-investors.
  • Explain why SVF could accept different financial returns than other investors in LearnZillion.