In a world clamoring for authenticity, Caroline Bressan, CEO of Open Road Alliance, is the real deal. From the get-go when many of her peers were graduating college and seeking careers on Wall Street, Caroline was determined to find ways to use the tools of finance to benefit the global community. Today she is part of the first wave of professionals who have spent their entire careers in impact to drive meaningful change.
Caroline’s career in impact investing began at the top – at Calvert Impact Capital where she focused on social enterprise and financial inclusion sectors in Latin America. Inspired by a female-led team of some of the best minds in impact investing, she dove enthusiastically into the world of impact, championing efforts to create a more inclusive and more efficient investing model. From there Caroline joined the investment advisory wing of Dalberg, structuring innovative financing mechanisms, including impact bonds and social impact insurance, in Sub-Saharan Africa.
One of her big takeaways from these years where she gathered invaluable boots-on-the-ground experience was that the financial markets simply weren’t working for the social sector and people at the base of the pyramid. One of the biggest challenges for impact enterprises was not raising capital but accessing the capital when it was most needed.
Oftentimes, early-stage impact companies that had already secured future funding, particularly those in developing parts of the world, but also here in the U.S., were failing because capital was “stuck” somewhere, unable to reach the company’s coffers. For example, funding delays due to COVID-19 or complications relating to a cross-border regulatory snafu or changes to investor diligence processes that delayed funding by additional months.
As a result, these impact companies that were otherwise financially sound were unable to pay staff wages, order inventory, or engage with partnership opportunities that required upfront investments. The effects of these temporary cash crunches were often devastating for young enterprises and the communities they serve.
Her Game Changing Idea:
Caroline understood that the timing of cash received was hindering the success and growth of global impact initiatives. When the question is not ‘if’ but ‘when’ capital will be disbursed, there is a simple solution to accelerating impact timelines: short-term bridge loans.
Caroline realized that the problem, and therefore the demand, was too great for grant capital alone to solve. Impact investing needed the financial markets to get involved to scale the amount of capital that could be deployed to “unstick” capital and prevent these funding breakdowns.
Enter Open Road Alliance. In 2015, Caroline teamed up with Open Road Alliance, an organization working on this very issue to “keep impact on track.” At the time, Open Road worked with organizations to solve unexpected roadblocks, providing funding in the form of grants and loans to allow innovative efforts to carry on without interruption.
Calling on her own background in finance and deal-making, Caroline established an asset management business within Open Road to attract investment capital from outside investors as a way to scale the impact the organization was having around the world, providing investors with a financial return. Caroline oversaw the launch of the Open Road Impact Fund, the first impact investment fund designed to address the financing delays that disrupt impact companies’ efforts to scale their impact. Open Road’s loan portfolio acts as intermediary financing option for impact companies, allowing for impact-first companies to maintain momentum when entering new markets, pay staff salaries, and ensure steady resources for longer-term growth.
The Open Road Impact Fund aims to disburse up to $100 million in short-term loans to over 100 impact organizations, in its first five years, which will keep nearly $1 billion of impact on track. Every dollar in the fund is recycled, leveraging 10X in additional follow-on financing.
Now that’s huge impact.
Why Her Work Matters:
Open Road’s work results in high-impact returns, in part because the organization directly engages with impact innovators to learn about their efforts, eliminating any risk of greenwashing. Additionally, because Open Road’s loans are designed to serve those that can successfully carry out their impact work once they work through the cash crunch, investments are targeted, efficient, and short-term.
This is labor intensive work that few organizations have the know-how or ability to do but it’s work that must be done if we are to solve our biggest global challenges at their source – right at the community level.
By stepping in with a small investment at the right moment, Open Road has been able to keep over 300 at-risk impact projects moving forward. To-date they issued $60 million in bridge loans that have kept over $700 million of impact work on track so far. And Fund 2 is now in the works.
We congratulate Caroline and thank her for her groundbreaking work!