Prime’s Additionality Screening Methods Featured in Impact Alpha

Harvey Koh, Senior Advisor at the Catalytic Capital Consortium, shares Prime's Additionality methodologies, highlighting how we utilize our Investment Advisory Committee and our venture capital management company, Azolla Ventures. He also shares the capital gap “valleys of death” that Prime has identified, in his article, Smarter targeting of capital gaps can make catalytic capital more effective. Koh writes the following:

Some capital gaps are transient and can be bridged with seeding or scaling catalytic capital. Other gaps are structural and require sustaining catalytic capital. And some gaps are layered together, even in the same market or sector.

For catalytic investors, the differences are important because we need to be clear on the capital gaps that we are targeting in order to deploy catalytic capital accurately and efficiently, with minimal waste and distortion to areas beyond those gaps. 

Since 2019, the Catalytic Capital Consortium, or C3, has been working to build the field of catalytic capital, including funding a range of efforts that build an evidence base for capital gaps around the world. That evidence base now includes many cases of how catalytic capital has already been deployed to meet those needs.

For example, common sense and research suggest that conversions to employee ownership in the US should become more investable as investor experience, track records, and understanding of the mechanisms grow. However, deal structures that give priority to worker-owners rather than to outside investors may clash with prevailing norms in mainstream finance and face a persistent structural capital gap.

To read the full article, please visit Impact Alpha.