STEP 2: Complete First Interview Form (FIF

size of the fund. Fund managers need a systematic approach to building awareness among SME owners about private equity and a streamlined deal screening process. Prior to investing we recommend fund managers spend considerable amount of time in training potential portfolio companies - SME owners and their current management. In Africa, few understand the industry in which investment funds operate. Owners find it hard to see equity as different from debt or a grant. They might say they understand, but don’t take their verbal assurances for granted. We have found that even returning Diaspora that are seeking investors benefit from basic training on investing and business development. A successful SME investment engagement and change management program begins before an investment is made. Beyond the relationship building that a fund manager and her team uses to source companies, we recommend that all owners and current managers of pipeline companies go through an introduction to private equity (PE) training course. To address this, RENEW offers a free PE Investment Seminar, a half-day program designed to educate the general business community about private equity. The program helps SME owners and managers understand 1) how the PE industry and the PE business model works, 2) the purpose and role that PE could play in a company’s growth plans and capital structure and how PE is different from other forms of capital, 3) the PE investment process - from sourcing to exit and the challenges investors and companies run into along the way; 4) benefits and drawbacks of having a PE investor join a company, and 5) the secrets to having a successful PE engagement. We also recommend deep dive sessions to further help target companies understand: 1) valuation; 2) term sheets; 3) the investment process - specifically due diligence, and 4) the post-investment process. The goals for this series of training programs are to help the companies self-select whether PE is right for them. In no way do we recommend scaring companies, but, if you are developing your own training, we do recommend the fund management team that delivers the training provide a healthy dose of reality along with general stories (not naming names) during the sessions to bring the training to life. The fund manager should also have portfolio companies share their stories - “the good, the bad and the ugly.” Your honesty and experience will win trust. Admit challenges you have had in the past and also provide examples of success stories. We recommend having current portfolio company owners share their experience with participants. For companies that attend the PE Investment Seminar training and have been successfully screened by the investment firm / fund’s investment team and advanced to the active pipeline (i.e., the investment manager commits a budget and resources to analyze the investment), RENEW strongly recommends that the investment firm / fund requires the owners and legacy managers to attend our Gender-Smart Exec’s Program that developed in partnership with Global Affairs Canada and enhanced in partnership with the USAID women’s economic empowerment fund. This is an intensive management and executive training program that teaches executives about the personal habits and corporate disciplines of top performing executives. The program curriculum, presentation decks, session video recordings and accompanying tools are all included on

QUICK REFERENCE GUIDE: DEVELOPING AN EXECUTIVE BUSINESS MANAGEMENT PROGRAM Unsure of where to start in developing and hosting a training program that develops entrepreneurs and executives’ business acumen? Look no further than the SG2X Website! RENEW has developed The Gender-Smart Exec’s Program (GSEP) in partnership with Global

the SG2X Playbook website (see the “Entrepreneur” landing page of the website). The GenderSmart Exec’s Program is critical to show the owners and managers what good should look like and helps them begin to identify where they need help, and what the investment manager will be developing in their company, should they become a portfolio company. The Gender-Smart Exec’s Program is also the core management development program supported and run by the SGS team (see below). We also believe training helps investment managers get to know about the SME and interact with the owners and the current management team. The trainers and the IM and SGS teams should attend all training both as reminders and as reinforcement of the training, but to also observe the attendees and meet them at breaks and at the social hour after the session.

Outcomes:

● Companies understand what PE is and if it is a good fit for them. ● The fund manager’s IM team has a strategic way to source companies. ● The fund manager builds their brand in the market. ● The fund manager’s IM team collects data on target companies and the SME sector via polls taken during the sessions. ● The fund reduces the number of false starts and save time and money.

Process:

● Note to Reader: The investment firm / fund should develop an SOP for their training unit that includes information such as how to schedule, prepare for and host a PE Investment

Seminar training.

● SIM and RM run the investment seminars.

● Support staff and/or in-country team assists with the logistics, coordination and hosting of the trainings.

Standards:

● Quality promotion efforts made with ample frequency and on all platforms to attract the target number of attendees.

● The number of registrations and attendees should be tracked. In order to reach the recommended target of 20 to 25 quality SMEs in attendance per training, the host will need to secure 75 to 100 registrations. Thus, the firm should train an average of 100 companies per year.

● Feedback on the training (i.e., attendee’s understanding of the concepts, value-add of the content, etc.) should be collected from attendees using a Feedback Form.

● All pipeline companies must attend an Investment Seminar before they can be presented to the IIC for active pipeline consideration.

● All companies attending the investment seminar must be entered into the Country

Pipeline tool.

● All team members must attend the seminar and network with companies during breaks.

STEP 2: COMPLETE FIRST INTERVIEW FORM (FIF)

It’s important that the RM establish a good working relationship with the company owners before screening the prospect. This might happen after the first encounter, or after a few casual meetings. Building a solid business relationship starts with a solid interpersonal relationship. Once the company is entered into the pipeline, this is when the clock starts for the step’s targets. All of the relationship building leading up to this step is a sunk cost, required for a smooth pre-investment process. Before holding the first interview with a prospect, the RM’s job is to build a good relationship with the owners and evaluate whether they are interested in an investment or in selling their company. If the team member (or RM) believes the prospect has the potential to be a good opportunity, the RM schedules a more formal first meeting to gather information needed to complete the First Interview Form (FIF). Getting the FIF completed shouldn’t take more than one meeting but building a relationship with the company might take multiple informal meetings. The key with the FIF is to gather as much information at the onset of the engagement to be able to evaluate if the prospect meets the investment criteria and will pass IIC approval. Scan the FIF before the meeting, and complete with FIF within 24 hours of the meeting so you do not forget any information. During the meeting, always take detailed notes. Always make sure you are kind and encouraging. It is about building a brand of trust and we want [INV./FUND MANAGER NAME] to be known as a firm companies come to - the first place - when they need financing to accomplish their business dreams. Always update the Country Pipeline tool once the FIF is completed. Fill in all data forms in the pipeline so the IM team can use the information for reporting and analysis work. Do not miss any fields of information. Once the FIF is completed, the RM must present, or pitch, the deal to the Investment Management team during the weekly country pipeline meeting and be able to articulate why they think the deal fits with [INV./FUND MANAGER NAME]’s investment strategy and our

overall portfolio construction. This takes time and practice, but after the first few pitches the team member will hone their skills. Assuming that this is the first time you meet to “talk business” with the entrepreneur/owner, we recommend you invest time to prepare for this meeting. Remember the most important tools for this stage is the [INV./FUND MANAGER NAME] - Investment Criteria and the FIF.

Outcomes:

 Determine if the company is eligible to receive investment funding from [INV./FUND MANAGER NAME].  To decide whether to advance to a sourced status, hold or pass. If the outcome is advancing the company to “sourced” status, then consequently: a) Completed FIF. b) Signed NDA. c) Completed company information in the Country Pipeline tool.

Process:

1. RM enters the company into the appropriate Country Pipeline tool: a. Complete the Country Pipeline tool. i. Document how [INV./FUND MANAGER NAME] met the company. This impacts the decision and helps us gauge where companies are learning about us. b. Complete all fields to the best of your knowledge. c. Note any fields that are missing that need to be collected during the first meeting. d. Enter your name in the RM role. 2. RM researches the prospect: a. The day before the meeting, complete one to two hours of desk research on their company. Learn about the industry and their competitors. b. Try to look for their website or connect with the owners on LinkedIn. c. Search Google News to see if the company has been in the news or if there have been any major new entrants to the market. d. Hint: See this like the “first date” - you should know who you are meeting with. Focus on the relationship and helping them understand the value [INV./FUND MANAGER NAME] brings beyond capital. 3. RM schedules the first interview: a. Ideally schedule the first meeting at the company’s place of operations. b. Identify where the company is and building in adequate travel time – try to be 10 to 15 minutes early.