Impact Risk Management in Impact Investing: How Impact Investing Organizations Adopt Control Mechanisms to Manage Their Impact Risk

This study explores how impact investing organizations manage impact risk by adopting control mechanisms. It examines the inter-organizational relationship between impact investors and investee social enterprises, highlighting the moderating role of social mission. Findings suggest that due diligence, sector specialisation, and communication enhance investment likelihood. The article emphasizes that, unlike traditional venture capital, impact investing effectiveness hinges on the investee’s ability to create social value, underscoring the unique dynamics of this relationship.