Builders Fund: Impact Prioritization Rating

Katharine Hersh (BS ‘10), a partner at Builders Fund (“Builders”), a growth-stage private equity impact investment firm based in San Francisco, was looking for a way to measure and monitor impact that embedded the thinking earlier on in the deal process and provided a shorthand to talk about prospective impact in the same way investors referred to financial return. The Builders team had a working framework called the Impact Prioritization Rating (IPR), which was implemented for companies at the top of Builders’ deal flow funnel that met baseline financial targets for the firm’s investment strategy. Builders invested in companies across its investment themes of “Sustainable Systems” and “Human Elevation,” and the tool was designed to allow the team to consider impacts across industries and business models, as well as to integrate impact and financial viability into deal prioritization discussions. However, the IPR had much room for improvement. Witnessing firsthand the passion and creativity GSB students had for impact investing, Hersh thought it would be a great opportunity for both the students and the Builders team to work together to iterate and improve upon the IPR. If successful, the experience would be additive across the impact industry—from the enlightenment of prospective agents of impact to a new way of approaching impact measurement and management (IMM).