Definition
Patient, flexible funding that accepts below-market returns to achieve social impact alongside financial returns, pioneered by organizations like Omidyar Network. Capitalism with a conscience, or venture capital with lowered expectations, depending on your perspective.
Example Usage
The impact fund deployed catalytic capital at 5% expected returns to prove the market existed before traditional VCs would enter.
Origin
Impact investing terminology, popularized in the 2010s
Fun Fact
Catalytic capital often fills the 'pioneer gap' in emerging markets or social enterprises, taking initial risks that enable later conventional investment at commercial terms.
Source: Impact investing and social venture capital
Related Terms
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See “catalytic capital” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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