The financial resources of an Innovation Partnership are used to incubate new Ventures. Expenditure is recovered as Ventures exit the incubation process and raise series A funding from Investors. Whereas the Innovation Partnership itself does not invest its financial resources in series A funding, the Fund’s sponsors have an opportunity to do so, and are given priority over other Investors. The Innovation Partnership is a not-for-profit organisation and any surplus is reinvested to support its mission to develop new Ventures that strategically manage their social and environmental impacts. Financial sustainability is reached as the number of successful Ventures grows.
Financial resources are sourced from the Innovation Partnership sponsors. These are key stakeholders that recognise the significance and benefits of establishing a system to support new Ventures with values-driven innovation at their heart. The monies raised typically take the form of long term unsecured loans. Redemption occurs at some point in the future when the Innovation Partnership itself ceases to operate or, reaches financial sustainability and when a Creditor chooses to exit. The fund also welcomes philanthropic donations from DAF’s and Gift Aid, and as the Innovation Partnership is a CIO, sponsors benefit from the tax relief that accrues from supporting a Charity. This tax benefit also applies to new Ventures when repaying incubation expenditure.
An Investment Panel is formed to represent the Fund’s sponsors and is responsible for approving the use of the Innovation Partnership’s financial resources.