PRINCIPLES

STAGE 1: PIPELINE MANAGEMENT

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Pipeline management is the start of the investment process and is therefore the most important steps to

get right in order to optimize the investment process, as all later stage activities are positively or negatively impacted by the quality and quantity of the deal coming into the top of the pipeline funnel.

QUICK REFERENCE GUIDE: PIPELINE MANAGEMENT

 Objective: Source and screen a high volume of deals in an efficient and effective manner; find the best to advance to IIC  Targets: Source 200 companies prospected (FIFs) per year, 20 companies advanced to A-pipe per year  Indicators of Success: # of FIFs per week, % of prospects advanced to sourced, # of DSFs per month  Scope: All activities before the first IIC vote to promote to A-pipe  Tools: Investment criteria, NDA, FIF,

DSF, country pipeline  Time commitment: Average 10 hours per week per team member  Main Activities: 1) Prospecting:

Networking, investment trainings, oneon-one meetings with companies, communications with company. 2)

Screening: desk research and forms, internal screening meetings, prep for

IIC  Accountable: SIM and RM  Responsible: RM and all staff  Best Practice: Be very strong at selling the firm’s value proposition. Know and use the investment criteria. Screen out deals as early as possible

Pipeline management begins with rigorous internal training for all members of the Asset Management

team. The trainings should be when new team members join [INV./FUND MANAGER NAME], and regular, annual, required trainings for the team. The main training tool is this SOP. Each step should be reviewed, on a regular basis, by the team. All team members should be thoroughly trained on the pipeline management tools: The Investment Criteria, the

Country Pipeline, the First Interview Form (FIF) and the

Deal Screening Form (DSF) to source and screen companies effectively and efficiently. Soft skills training on communicating and selling [INV./FUND MANAGER NAME]’s value proposition to stakeholders and company owners (promoters) should also be done. Note to Reader: RENEW has found that the success of sourcing and screening SMEs in Africa is largely a function of the quality of our network, and how educated promoters are about investing. We have found that many stakeholders (i.e., resource partners whose clients include SMEs) and entrepreneurs do not understand how private investing works, which creates issues and delays for RENEW as we try to advance companies through the investment process. By building a network of diverse, local stakeholders that refer companies to RENEW, and by running informative and engaging trainings for stakeholders and entrepreneurs (e.g., on the basics of the private investment process), RENEW sees a significant improvement in the volume and quality of companies coming into the top of the pipeline funnel, and in the pace at which companies move through the investment process. It is important that sourcing networks are unbiased and provide a wide array of diverse businesses to ensure the team does not become stuck in a biased sourcing “bubble”. Once companies start to come into the pipeline, the best team members are skilled at the art and science of pipeline management. The “art” of sourcing is relationship building and networking. The best sourcing team members are those that are excellent at public speaking,