Definitions


Base of The Pyramid - BOP

According to the Financial Times:

"The Base of the Pyramid theory suggests that new business opportunities lie in designing and distributing goods and services for poor communities. The idea is espoused by influential US business school academics CK Prahalad and Stuart Hart, who argue that companies can help eradicate poverty by providing goods and services for the 4bn people who live on less than $2 a day - this group is known as the base of the pyramid.

"Few companies have so far addressed the opportunities in delivering goods to this group, whose purchasing power is $5,000bn a year according to the International Finance Corporation, the private sector arm of the World Bank."

Ecosystem

The complex set of relationships among individuals, organizations and their physical environment. For example: entrepreneurs, suppliers, clients, government entities, academia, venture capital, public welfare systems, business accelerators, existing industries, talented HR, etc.

Since the early 1990s, this terminology has been used to describe economic communities that rely upon a platform of interacting organizations and individuals, whose capabilities and roles evolve and align over time.

Impact Investing

According to the Global Impact Investing Network:

"Impact investments aim to solve social or environmental challenges while generating financial profit. A rapidly growing supply of capital is seeking placement in impact investments across geographies, sectors, and asset classes, with a wide range of return expectations. The glue that binds those who operate in the impact investing industry is the shared conviction that creative investments can play a crucial part in addressing social and environmental challenges. This investment interest is sparking the emergence of a new industry that operates in the largely uncharted area between philanthropy and a singular focus on profit-maximization."

Social Business

Shorthand for "business that improves life at the base of the pyramid" and "business for social impact". While Muhammad Yunus stipulates that social business cannot distribute profits to shareholders, Potencia's partners are open to any shareholding and governance structure that aims to maximize positive social impact.