TOOLS

(e.g., assume a risk scenario will happen – how much of the investment can we recoup?), and checking the quality of machine suppliers and raw material suppliers. The main outputs of the DD Stage include: ● A final Financial Model. ● The Final Confidential Information Memorandum (Final CIM) that incorporates DD findings. ● A complete data room with information on the company, market and all supporting documents gathered from the company, customers, suppliers, etc. and referenced in the CIM. ● A First 180-Days Statement of Work and First 180-Days Project Plan that outlines the corrective action plans the [INV./FUND MANAGER NAME] SGS team will follow postinvestment to help the company start down the path of becoming a gender-smart SME.

SCOPE

DD takes place from the time the External IC makes its first approval to when the External IC makes their final approval. In some cases, a due diligence budget is prepared along with the due diligence plan, which needs to be reviewed and approved by the CIO.

Note that DD will overlap with STAGE 4, preparation of legal agreements and investment

closing. Generally, the definitive investment agreements will be negotiated and drafted during the latter portion of the DD stage, so that the investment agreements are finalized concurrently with presentation of the final CIM to the IIC, External IC and fund investors (as appropriate/required). In addition, certain items that can be prepared in advance for the closing process can be started while DD is ongoing.

PRINCIPLES

The following principles are non-negotiable standards that must be adhered to during the due diligence stage: ● The RM and all support teams working on DD must use the Due Diligence Project Plan and Checklist referenced in the “Tools” table below. ● The RM and all participating in DD must document all interview notes and save all research documents in the appropriate company folders, using the naming and file management protocol. ● The RM must use references and citations in the CIM and save all files in the appropriate “sources and citations” supporting folder. ● Never be judgmental, but rather act unfazed if serious issues arise. Doing so will encourage the company’s team to be forthright with you. ● Find creative ways to rephrase questions and continually ask and re-ask, to find out as much information as possible during diligence. The RM should ask repeatedly, whenever you meet with the owner or other executives: