Diamond Trust Bank Kenya Ltd. · NSEKE:DTK
Diamond Trust Bank Kenya — Investor Presentation (October 2022)
27 slides from Diamond Trust Bank Kenya's investor presentation, Oct 27, 2022
Slide 1: Investment Readiness for Micro, Small and Medium Enterprises (MSMEs)
INVESTMENT READINESS FOR MICRO SMALL AND MEDIUM ENTERPRISES (MSMEs) Presented by: Ndung’u Ndegwa, BDS Consultant Email: ndegwadn@gmail.com Duration: 2.5 hours Date: 27/10/2022
Slide 2: Session Outline
Session Outline ➢Investment readiness overview ➢Aspects of investor readiness ➢Capital raising process ➢Dimensions of investment readiness ➢Benefits of investment readiness ➢Barriers to capital raise 2
Slide 3: Mindset
Mindset ❑ Mindset is an established set of attitudes; the outlook, philosophy, or values of a person; frame of mind, attitude, and disposition ❑ A mindset may also arise from a person's world view or philosophy of life. ❑ Generally classified into 2; fixed mindset and growth mindset 3
Slide 4: Mindset
Mindset “Failure is the limit of my abilities” FIXED MINDSET “I'm either good at it or I’m not” “My abilities are unchanging” “| don't like “I can either do it, to be challenged” oe ane “My potential is predetermined” “When I'm frustrated, | give up” “Feedback and criticism are personal “| stick to
Slide 5: Overview
Overview ❑ Investment readiness is “the capacity of an enterprise to understand and meet the specific needs and expectations of investors,” ❑ External funding provides critical resources that allow businesses to develop new products, expand production capacity, and access new markets ❑ Two key compo
Slide 6: Aspects of Investment Readiness
Aspects of Investment Readiness ❑ Business viability: must demonstrate to investors that their businesses are sustainable, well-run organisations – o a sound business model, o unique value proposition and o qualified team ❑ Investor materials: Documents such as o business plans, o financial models a
Slide 7: Capital Raising Process
Capital Raising Process PREPARATION PHASE INVESTOR ENGAGEMENT DEAL CLOSING AND PHASE DISBURSEMENT PHASE 7
Slide 8: 1. Identifying Capital Need
1. Identifying Capital Need ❑ Before pursuing external capital, businesses need to develop and refine their growth strategy to evaluate their capital need ❑ should identify what initiatives they want to fund and determine how funding those plans aligns with their long-term goals ❑ assess whether the
Slide 9: 2. Develop Investor Materials
2. Develop Investor Materials ❑ A business plan is an internal document describing the business, its objectives and its strategy to achieve those objectives. ❑ A financial model translates the business plan into a numerical, analytical format that allows the business to determine the capital needed
Slide 10: 3. Determine Capital Structure
3. Determine Capital Structure ❑ Capital structure is the combination of various funding sources that a business uses to finance itself - internal funding (e.g. retained earnings), external funding (e.g. debt, equity, grants) or a combination ❑ Management should consider the cost of capital and the
Slide 11: 3. Investor Identification and Outreach
3. Investor Identification and Outreach ❑ After understanding their capital needs, businesses should familiarise themselves with the investor landscape, including the types of investors present, the type of capital they offer, and the types of businesses they invest in ❑ Key resources for finding in
Slide 12: 5. Initial Due Diligence
5. Initial Due Diligence ❑ Due diligence is defined as “investigation and analysis in support of a recommendation.” Investors request business documents and may call the business to ask questions to understand the market opportunity, business model, traction, growth strategy and capital requirement
Slide 13: 6. Further Due Diligence
6. Further Due Diligence ❑ This step involves intensive investigations into the previously shared internal documents and business processes, where investors ask extensive questions about past and future performance. ❑ Information obtained via further due diligence will be used to negotiate the term
Slide 14: 7. Negotiate a Term Sheet
7. Negotiate a Term Sheet ❑ A term sheet is a document that outlines the commercial and control terms and conditions for a potential investment. It guides the development of a final investment agreement. ❑ It often includes an “exclusivity clause” that prevents businesses from soliciting other inves
Slide 15: 8. Closing and Investment
8. Closing and Investment ❑ A finalised term sheet is presented to the investor’s investment committee for approval, which is then translated into an investment agreement by legal counsel. ❑ It sets out the o capital commitment, o timelines and the o terms and conditions of the investment
Slide 16: 9. Execution of Growth Plan
9. Execution of Growth Plan ❑ Once the deal has closed and funds have been disbursed, the business should be prepared to execute on a short-term roadmap, to ensure that it hits key milestones. ❑ Some investors deploy capital in tranches depending on whether the business meets these milestones. ❑ Bus
Slide 17: Dimensions of Investment Readiness..1
Dimensions of Investment Readiness..1 17
Slide 18: Dimensions of Investment Readiness..2
Dimensions of Investment Readiness..2 Dimension Areas of consideration Significance 1. Market Landscape • Target market size An understanding of these factors enables the • Product/service demand investor to assess whether there is a • Competitive landscape significant market for the products and •
Slide 19: Dimensions of Investment Readiness..3
Dimensions of Investment Readiness..3 4. Historical • Sales Investors need to understand the drivers of performance / • Customer base historical financial and operational metrics to Traction to-date • Gross and net margins understand key growth assumptions • Cash flows supporting projections 5. Grow
Slide 20: Dimensions of Investment Readiness..4
Dimensions of Investment Readiness..4 7. Governance • Processes and controls Governance structures influence the • Board of Directors (BOD) implementation of the growth strategy, • Competencies and role of regulatory compliance, and efficiency of the BOD the due diligence process • Statutory documen
Slide 21: Summary: Dimensions of Investment Readiness
Summary: Dimensions of Investment Readiness ❑ Market Landscape: Clearly defined target market with an understanding of the completion and risks ❑ Business Model: Proven and efficient processes and partnerships to ensure implementation of the model ❑ Team: Competent and motivated team with clearly de
Slide 22: Benefits of Investment Readiness to Business
Benefits of Investment Readiness to Business ❑Businesses understand themselves better. Investment ready businesses understand their capital needs and are aware of the capital available to them. ❑Businesses can engage better with investors to raise external capital. An investment-ready business is we
Slide 23: Barriers to Successful Capital Raise
Barriers to Successful Capital Raise Business constraints ❑ A management team that lacks key skills may signal to investors that the business is unable to achieve its growth potential ❑ Incomplete, inconsistent or vague information makes it difficult for investors to understand the business ❑ Growth
Slide 24: Summary
Summary The secret to great riches and wealth are: ❑ OPT – Other People’s TIME ❑ OPM – Other People’s MONEY - Robert Kiyosaki 24
Slide 25: Q&A
DIAMOND TRUST BANK OTB Q&A ENTERPRISE <j PROGRAM ») KENYA BANKERS ASSOCIATION
Slide 26: Thank You!
ENTERPRISE PROGRAM lAvea@ THANK YOU! <)> KENYA BANKERS ASSOCIATION
Slide 27: Diamond Trust Bank
DIAMOND TRUST BANK @ Don't let he noise of others’ opinions drown out your own inner voice Q
Diamond Trust Bank Kenya — Investor Presentation (October 2022) on 6ix