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Explainer
Traditional finance underwrites two independent questions and needs a yes to both. Recoverable grants need a yes to neither. That single asymmetry is why the market serves one quadrant and exiles the rest — and why a recyclable pool can matter out of proportion to its size.
The two axes are bankability (can a venture service a fixed, scheduled, priced claim?) and extractability (is there a financial surplus a financier can capture?). Debt needs the first; equity needs the second. So the market fully serves only the top-right, and equity reaches partway into the top-left for the exitable few. Everything else is starved. Recoverable grants are the one instrument indifferent to both axes: patient and contingent (so bankability is moot), and returnof capital not on it (so extractability is moot).
Plot four archetype ventures on the map, dial the recovery rate, and watch the payoff. A dollar deployed at recovery R does 1 / (1−R)of cumulative work as it recycles — the thesis and the “10–50×” multiplier are the same claim, seen from two angles.
bankable · non-extractable
Steady earned revenue (a café or cleaning business employing people with barriers) but a mission-capped margin. It can repay — it just can't afford priced debt or dilute to equity.
A dollar at this recovery does
10.0×
SVM = 1 / (1 − R) = 1 / (1 − 0.90)
…of cumulative work as it recycles — and it comes back to work at 26%/yr (a full recycle roughly every 3.9 yr).
Convex: the last points of recovery dominate. 90→95% doubles it; 95→98% more than doubles it again.
Empirical anchor: diversified early-stage impact recovers ~91c/$ (Acumen); the most concessional capital targets capital preservation only (Omidyar B2). No AU recoverable-grant benchmark exists yet — these R’s are illustrative.
Blend a pool across the map
The pool is two things: a high-R engine that regenerates the corpus, and a low-R consumption tranche it subsidises.
9.7×
pool multiplier
60% in the engine (R ≥ 80%)
Even a consumption-tilted pool beats a traditional grant’s 1×. First-order estimate (Σ w·1/(1−R)); a full model credits dynamic redeployment into the engine.
The market dominates by dollar volume (it funds the safe, collateralised top-right) but serves a minority of entities. The Australian evidence:
How much is exiled — the evidence
~95%
of AU SME lending is collateralised — unsecured SME credit sits below 5%.
RBA, 2018–2025
85–92%
of the ~$157B AU impact market is market-rate GSS bonds; concessional capital is a small minority.
Impact Investing Australia / RIAA, 2025
~7%
of the ~$222B charity sector's revenue is donations/bequests; repayable capital is negligible.
ACNC, 2023
~91c/$
is the recovery ceiling even for diversified early-stage impact; no AU recoverable-grant benchmark exists.
Acumen / Omidyar
Verified via adversarial multi-source review. The market serves the top-right by dollar volume; by number of ventures and share of the mission economy, the exiled region is the majority.
The whole model rests on a recovery rate that is currently manufactured, not observed. The best anchor is near-but-below par (Acumen ~91c/$; Omidyar’s most concessional tier targets capital preservation), and no Australian empirical benchmark for recoverable-grant recovery exists. That gap is also the opportunity: a recoverable-grant pool at scale would generate the first real data.
Figures verified via adversarial multi-source review (RBA, ACNC, Impact Investing Australia / RIAA, Acumen, Omidyar). Archetype recovery rates are illustrative.