Free tools and templates to help social enterprises and impact investors navigate the legal dimensions of impact investing in Australia.
This Toolkit is provided for general information and educational purposes only and does not constitute legal, financial, or tax advice. Read full disclaimer.
Designed for organisations raising impact investment and investors deploying capital. Combines practical tips and process guidance with legal templates and interactive tools. Some resources help you prepare, others help you execute. Each stage signposts what to use and when.
Each document page includes a downloadable legal template drafted by MinterEllison. Before downloading, you will be asked to accept a disclaimer confirming that the templates are provided as general guidance only, do not constitute legal advice, and that you will seek independent legal advice before use. You will also be asked to provide your name and email.
Select your role below to begin. You don't need to start from the beginning. Navigate directly to the stage that reflects where you are.
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Give feedbackAre you actually ready?
Before speaking to investors, consider working through these four tools. Together they cover some of the key areas investors may scrutinise.
If you discover significant gaps, it may be better to strengthen your foundations before raising capital.
If you haven't yet settled on a legal structure, start here. Social Impact Hub's Social Enterprise Legal Toolkit provides guidance, templates, and real-world examples to help you choose and set up the right legal form for your organisation.
Explore the Social Enterprise Legal ToolkitCan you clearly explain your impact and business model?
Investors will typically expect clarity on both impact and financial viability. You may want to prepare:
A self-directed online education resource designed to build the capacity and capability of changemakers, purpose-driven organisations, and impact investors to mobilise capital and catalyse impact.
Go to PlaybookHow much do you need to raise?
Consider basing your target on what your enterprise needs to hit its next meaningful milestones, not on what feels ambitious or what investors might offer.
Capital raising has implications beyond capital. If raising equity, each share issued to an investor dilutes the founder's proportionate ownership, which affects both the founder's share of future profits and their voting control over the Company. Depending on the size of the investment, the investor may also be entitled to appoint a director to the Board and may hold approval rights over key business decisions. These are not reasons to avoid raising equity, but they are relevant considerations when determining how much to raise.
In some cases, a founder may choose to raise a smaller amount in order to retain a greater degree of control and simplify governance in the early stages of the business — accepting that a further raise may be needed at a later point once the enterprise has demonstrated traction or impact. Others may prefer to raise a larger amount upfront to provide a longer runway, accepting the governance implications that come with a larger investor stake.
There is no single correct approach. The appropriate target will depend on the enterprise's stage of development, growth plans, appetite for shared governance, and the terms on which capital is available.
Aim to identify enough runway to deliver on your growth plans and, if relevant, prepare for a subsequent funding round. Milestones could include developing a minimum viable product (MVP), hitting target revenue, expanding into new markets, reaching breakeven, or demonstrating impact at scale.
When assessing the amount needed, it may also be relevant to consider:
The following is a simplified, illustrative formula only. Your actual capital requirement will depend on many factors specific to your organisation — including one-off costs, working capital needs, and the costs of the capital raising process itself. You should seek financial advice to determine the appropriate amount to raise.
Target capital raising = (Monthly cash burn × Desired runway) + Buffer
The rate at which your organisation spends its available cash. For early-stage social enterprises this is often a critical metric, as it can indicate how long you can operate before needing additional funding.
Investors may fund larger amounts in stages, with each tranche released once agreed milestones are achieved. This can reduce risk perception but introduces funding uncertainty. It is important to consider whether milestones are realistic and, where possible, within your control, and whether sufficient upfront funding is available to maintain operations between tranches.
Are you prepared to pitch to investors?
A pitch is often your first substantive interaction with a potential investor. Social enterprises face a particular challenge: you need to speak to both the financial and impact dimensions of your work in a way that resonates with investors who may weigh those dimensions differently.
Have you identified the right investors to pitch to?
Not all investors are the right fit for your organisation. Before investing time in conversations, assess whether a prospective investor is aligned with your mission, values, financial expectations, and governance model.
A well-aligned investor can strengthen your mission. A poorly-aligned one can create long-term tension.
Due diligence is when investors look under the hood. They will typically review your financials, governance, and impact model in close detail. For social enterprises, the impact side of that review can carry as much weight as the financial side for impact-first investors. Being prepared, organised, and consistent throughout this stage builds trust and keeps momentum.
While investors usually conduct high-level evaluations of a company to agree on preliminary terms before agreeing a Term Sheet and the key commercial terms, comprehensive due diligence — such as verifying financials, legal contracts, intellectual property, and operations — is often delayed until there is a signed, non-binding Term Sheet in place (see Stage 4).
Should you sign a Confidentiality Agreement?
If you are about to share detailed financials, strategy, or intellectual property, consider using:
This protects confidential information during early-stage discussions.
It is not advisable to disclose detailed financials, business plans, impact methodologies, or other sensitive information before a Confidentiality Agreement is signed. You should seek legal advice about what protections are appropriate in your circumstances.
| Stage | What happens |
|---|---|
| Screening | Investor listens to your pitch and runs the opportunity through their internal assessment process. |
| Pre-diligence | Confidentiality agreement signed, cursory review of dataroom, desktop research on enterprise and industry. |
| Initial diligence | Deep dive sessions with founders, customer interviews, market research, third-party verification; Term Sheet negotiation. |
| Detailed diligence | Financial, legal and impact diligence. |
| Documenting | Finalise legal agreements, sign, and fund the investment. |
| Post-close | Introductions, resource support, coaching, and getting out of the way. |
What information will you need to share?
Some of the information you may be required to share with a potential investor includes:
Building your risk management framework
Effective risk management can help you protect and advance your mission as it grows and takes on external investment. Developed with MinterEllison, the tool below sets out four key documents that may be used together to form a risk management framework.
Four core documents to protect your mission after investment, plus an interactive tool to generate your own drafts.
Do you have a dataroom ready?
Investors who express serious interest will often request access to a dataroom. Consider having it prepared before you start pitching — it can signal credibility and help keep the process moving.
Unlike email attachments, a well-configured dataroom can let you control access, track who has viewed what, and update materials as conversations evolve, without resending files.
Not all of this needs to be available from day one. A pitch deck, company overview, and summary financials are typically shared early. More sensitive documents — employment agreements, shareholder agreements, key commercial contracts, and information about proprietary intellectual property — are better held back until the process is more advanced, a confidentiality agreement is in place, and you have confirmed you are legally permitted to share them.
How to set it up
While this section addresses due diligence by the proposed investor, social enterprises may also wish to consider conducting their own assessment of the investor — for example, their track record with similar organisations, approach to governance, and alignment with mission.
Key commercial and legal terms are discussed and agreed at this stage, including valuation, ownership, governance rights, and conditions. Negotiation should be approached with the idea that the parties are beginning a long-term relationship, not entering into a one-off transaction. The terms agreed here will likely shape how decisions are made and risks are shared for the duration of the investment relationship.
Before discussing terms
Review the Negotiation Tips for practical strategies and warning signs to watch for. Enter into funding arrangements that align with your long-term mission and sustainability.
Have you reached verbal agreement?
Once you reach verbal agreement with an investor, the Term Sheet is the first formal document. It captures the key terms before either party moves to full legal documentation.
The Term Sheet typically covers: investment amount, valuation or pricing, type of instrument, governance rights, reporting expectations, and impact commitments.
Most commercial leverage exists at the Term Sheet stage. If it's not in the Term Sheet, it's harder to change later.
The Term Sheet in this toolkit has been drafted specifically for an equity investment and summarises the key terms of a proposed subscription for shares in a Company. Entry into the Subscription Agreement will typically be subject to the investor completing due diligence on the Company's business, finances, legal standing, and operations. See Stage 3 (Due diligence) above for guidance on how the investor's due diligence process typically works.
Note: These are legally binding documents. You should seek legal advice before signing.
What documents will formalise the investment?
Depending on what you and the investor agreed, this may involve:
Used where an investor is providing capital now in exchange for the right to receive shares at a later date — typically at your next funding round — at a price determined by terms (such as a discount or valuation cap) agreed upfront.
Used where you are borrowing money and the loan terms include obligations or adjustments linked to your impact performance — for example, reporting requirements or pricing linked to the achievement of agreed impact outcomes.
Used where a new investor is subscribing for shares in your organisation, setting out the terms of that subscription — including conditions that must be met before shares are issued, and warranties given by both parties.
Used where an investor is taking an equity stake and the parties need to establish the ongoing rules governing the relationship between all shareholders — including decision-making, transfer of shares, exit mechanisms, and (for social enterprises) protection of mission.
Are you prepared for life after investment?
Taking investment will generally change the way your organisation operates. You may have new legal obligations, new people to report to, and potentially less room to change direction without consultation. Three areas typically warrant immediate attention:
Investment is not just a transaction. It is an ongoing relationship and responsibility.
Monitoring your impact commitments
After investment, the impact targets agreed in your deal documents may give rise to ongoing reporting or performance obligations. This guide explains how to track and communicate your outcomes throughout the investment period.
How to track and report on your impact commitments after investment.
Meeting your financial reporting obligations
Investors will generally expect regular financial updates, and your deal documents will specify what, how often, and in what format. This guide helps you stay on top of those obligations.
How to meet your financial reporting obligations to investors.
The documents contained in the toolkit are generally drafted in an 'investee friendly' way. It is recommended investors seek their own legal advice if they wish to strongly protect their interests. A dedicated Investor Playbook with deeper guidance for deploying capital is in development for 2027.
Should you sign a Confidentiality Agreement?
Before sharing, or receiving, sensitive information during due diligence, it's important to have legal protection in place. A confidentiality agreement establishes clear obligations before any sensitive materials are exchanged.
Use before sharing or receiving sensitive information. Protects financials, impact frameworks, operational plans, and other confidential details exchanged during due diligence.
Have you agreed on the key commercial terms?
Once there is in-principle agreement, the next step is to put the key terms in writing before moving to full legal documentation.
Summarises the key terms of a proposed impact investment before either party moves to full legal documentation. It forms the basis for negotiation and, once agreed, guides the lawyers drafting the final agreements.
Most commercial leverage exists at the Term Sheet stage. If it's not in the Term Sheet, it's harder to change later.
Which document formalises your investment?
The right instrument depends on the agreed investment structure, whether equity, debt, or a convertible instrument.
If you are providing funding now but valuation hasn't been agreed, with the right to convert into equity at the next funding round.
If you are providing debt investment and want the agreement to include covenants tied to the organisation's social or environmental outcomes.
If you are purchasing shares and need a formal document to make the transaction legally binding.
What are the rules once you're a shareholder?
An equity investment creates an ongoing relationship. The Shareholders Agreement sets the terms of that relationship from the outset.
Sets out the rights, obligations, and decision-making rules that apply once you become a shareholder, including board rights, veto powers, approval thresholds, and exit provisions.
Investment is not just a transaction. It is an ongoing relationship and responsibility.