Phase 2 - Prepare

2.2 Begin conversations with investors

Social investors that participate in SIBs lie anywhere on a spectrum:

Spectrum of investors

Some are experienced in social investment, and for some SIBs are a new concept. Whoever the investor(s), there can be a long road between initial contact and the closing of a deal. As with commissioners, it is best not to take early interest as a sign of firm commitment.

Social investors also vary in their expectations of financial return. Some are willing to accept a relatively low return for helping to finance a social change, while others are more commercial and are looking for a higher return. To identify which investors to approach, it can help to think about the profile of return expectation and risk appetite that would be a good fit for your programme and SIB.

Once a provider has been invited to meet an investor, they should be prepared for questions such as these:

Current programme (if applicable)

  • What interventions are you currently delivering?

  • What is your theory of change?

  • What is the average duration of an intervention? 

Current outcomes (if applicable)

  • What is the success rate?

  • What are the longer-term outcomes? (i.e. what do beneficiaries go on to do?)

Current data systems (if applicable)

  • Which systems do you use to collect data on durations, success rates, longer-term outcomes? 

  • How often do you monitor your outcomes?

  • In what form do you report your results?

Proposed programme

  • What is the proposed programme? 

  • What are the intended outcomes and impact?

  • Have you discussed the programme with commissioners? 

  • Is there commissioner appetite for paying for the programme?

Organisational change

  • How comfortable are you with being paid for outcomes?

  • What do you think an external investor can bring to the partnership?

  • Are you willing to take on a multi-year contract?

  • Are you willing to take on debt?

  • What is your view on taking on risk?

Questions that a SIB provider might ask an investor include:

  • Why are you considering engaging in this SIB?

  • Which sectors do you support?

  • Which types of SIB contracts have you invested in?

  • When might we expect a final investment decision?


Investor Discussion Template
Contributed by TSAP

Download Tool

This tool will help you to keep track of the nature, approach and fit of the investors you are talking to. It offers 15 areas to investigate during your discussions

Next: 2.3 Get your board on board