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Poem Framework Due Diligence

The document outlines the POEM framework for conducting due diligence on a business. It defines due diligence as systematically collecting and analyzing relevant business information to form an opinion for an investment decision. The POEM framework evaluates a business across four areas: Proposition, Organization, Economics, and Milestones. Information is gathered from the business on its market analysis, financials, processes, and future strategy to analyze strengths in these four areas and determine investment suitability.

Investor Relations◦Business◦Economy & Finance◦
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Due Diligence Overview•
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DUE DILIGENCE USING THE POEM® FRAMEWORK Techno Vision Communications © 2013 Wednesday, 13 November 13 1
The POEM® Framework PROPOSITION ORGANISATION ECONOMICS MILESTONES 2 Techno Vision Communications © 2013 Wednesday, 13 November 13 2
Due Diligence Definition & Purpose What we want to Know Where we get the information from “Due diligence” is a systematic collection & analysis of relevant business information to form an opinion.  An investigation of the business, its vision, current status, practices, processes and policies.  An examination aimed at giving information for an investment decision using the principles of shareholder value analysis for evaluation. Techno Vision Communications © 2013 Wednesday, 13 November 13 3
Information Required PROPOSITION ORGANISATION ECONOMICS MILESTONES • Market analysis • Customer analysis • Sales analysis • Competition • Pricing/ Profit margin • Regulation • Supplier • Organisation Chart • JD, R&R • Processes -Sales -Marketing -Procurement -Logistics -Customer -Staff • Technology usage (Users, Front & Back end) • Current & Historical Performance • Projections (3-5 years) • Balance Sheet • Cash flow • Profit & Loss • Future strategy • Business model • Customer base • Operation growth • Stage Funding expectations Techno Vision Communications © 2013 Wednesday, 13 November 13 4
What we should know after Due Diligence PROPOSITION (MARKET STRENGTH) ORGANISATION (MANAGEMENT DEPTH) Product/Service Line Competitive advantage Growth market Entrepreneurial Vision Track record of success Management depth ECONOMICS (FINANCIAL RETURNS) Satisfactory Revenue Strengths Credible future profitability Acceptable Cash needs MILESTONES (EXIT POTENTIAL) Good exit routes Feasible –follow on investment Satisfactory exit value Techno Vision Communications © 2013 Wednesday, 13 November 13 5