<h1 style="text-align:center;">Term Sheets - Just What the Heck Are They?</h1>Investing On The Frontier’s host, Matt Davis, speaks with RENEW’s own legal guru and General Counsel, Tom Scriven, in the podcast’s latest episode.After relating some quick updates on key Ethiopian economic indicators (exchange rates, inflation rates, coffee prices, etc.), Matt and Tom set out to decode and provide clarity on term sheets, and why they are such an important part of the investment process – for both investors and entrepreneurs.Tom gives some great insight on the significance of going to terms, the typical outline of a term sheet and defines several key terms that are commonly found in a term sheets that every investor should know.Novice and sophisticated impact angel investors alike will find value in this informative discussion, so be sure to tune in to this month’s episode of Investing On The Frontier!&nbsp;&nbsp;

Investing On The Frontier podcast invites RENEW’s Tom Scriven to discuss all things term sheets.

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Term Sheets - Just What the Heck Are They?

<h1 style="text-align:center;">Key Resources for Executives</h1>In the following post, we look at key resources to help executives manage and perform better in their roles. Below are 4 articles that will help you achieve this:Does brainwriting or brainstorming work better for generating creative/problem-solving ideas? In the article,<a href="http://www.chicagotribune.com/bluesky/originals/ct-creative-class-leigh-thompson-bsi-20170511-story.html"> Who Needs Brainstorming? Brainwriting Gets Way More Ideas, This Prof Says</a>, research shows that Brainwriting is much more effective than brainstorming. If brainstorming involves verbalizing ideas, brainwriting entails writing down ideas individually and then sharing it in a meeting.<a href="https://hbr.org/2017/05/why-do-so-many-managers-avoid-giving-praise">Why Do So Many Managers Avoid Giving Praise</a> outlines how the most difficult part of a manager’s job is giving feedback. In a survey of 7,631 people, participants were asked whether they believed that giving negative feedback was stressful or difficult, and 44% agreed.&nbsp;Research suggests that if you want to be seen as someone who gives good feedback, you should proactively develop the skill of giving praise as well as criticism.<figure class="image"><img src="/uploads/abg_training_2_rows_60661967de.jpg"></figure>Many manufacturing firms leave enormous value on the table because of their approach to sales and operations planning. <a href="http://www.bain.com/publications/articles/good-sales-and-operations-planning-is-no-longer-good-enough.aspx">Good Sales and Operations Planning is No Longer Good Enough</a> shows how they tend to use rough rules of thumb rather than rigorous mathematics, and they lack close coordination among different departments. This framework from Bain Consulting will help you plan in a more integrated way.In the modern world when everyone is busy, you need to be specific about how to get to the point in everything you write. Grammarly, the best app for helping people use the right grammar in communications, gives tips about how to write well and get attention in the article <a href="https://www.grammarly.com/blog/specificity-in-writing/?utm_source=grammarly&amp;utm_medium=email&amp;utm_campaign=BlogNL&amp;utm_content=NL_052017&amp;utm_source=&amp;utm_medium=email&amp;utm_campaign=&amp;utm_content=">Be Specific! How to Get to the Point in Everything You Write.</a>

Key resources to help executives manage and perform better in their roles.

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Key Resources for Executives

<h1 style="text-align:center;">Three Critical Resources for Business Growth</h1>Too often we witness companies who are equipped with a wonderful product and an elaborate business model fail without ever realizing their potential. The truth is, building a successful company is much more than simply writing the execution plans we all did in business school, it involves understanding the “real-life” components of your business, namely your customers. As outlined by Udacity in their course <a href="https://www.udacity.com/course/how-to-build-a-startup--ep245">How to Build a Startup</a>, instead of focusing on what the entrepreneur thinks will work, it is critical for companies to leave behind their own internal thought bubbles, get out of their offices, and go out on the road to validate their ideas by engaging with real-life customers. Only then can the entrepreneur find proper solutions to their difficult questions and establish a truly effective business model.But, the hard work doesn’t end there. If we had a dollar for every time we heard a company tell us that their business model will allow them to provide the consumer with the lowest cost, highest quality product all while offering the best customer service company in the market, then we'd be rich. Not surprisingly, we discover that the companies that make this claim are mediocre at best. Why?In <a href="https://www.amazon.com/Discipline-Market-Leaders-Customers-Dominate/dp/0201407191">The Discipline of Market Leaders</a> the authors outline the reason: market leaders pick one of the three core business strategies (cost, quality or service) and obsess about doing that one thing better than their competition, while happily settling to simply keep up with their competition in the other two areas. Once the one area is chosen, all of their strategic planning, investments, budgeting activities, incentives, etc., focus on making that one area better and better, every week, month and year. Everyone in the company knows that this one area of focus is paramount.Think of Apple, Walmart or Nordstrom as examples of market leaders that have chosen a particular area and continue to obsess over it. At RENEW, we enjoy challenging ourselves, our pipeline and our portfolio companies to define this one thing, which in turn helps us and them to focus our work and tap into new ideas to compete, win, and become market leaders.So how can businesses figure out what’s needed for their go-to-market strategy? It’s a crucial moment that can so easily go off the rails without the right strategy. <a href="http://firstround.com/review/leslies-compass-a-framework-for-go-to-market-strategy/">Leslie’s Compass</a> is a simple test for entrepreneurs to smartly deploy their limited sales and marketing dollars when they are launching their first product and have one chance to make a strong, first impression.<figure class="image"><img src="/uploads/3_resources_6602c61d80.jpg"></figure>

RENEW explores three resources for companies that will help them grow into market leaders.

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Three Critical Resources for Business Growth

<h1 style="text-align:center;">Resources on Global Markets</h1>In the following post, we bring your attention to some key players in the global markets as well as insightful commentaries that are helpful in learning about global supply chains. Below are four articles that we’ve found helpful to better understand global markets: &nbsp;<ul><li><a href="https://www.bloomberg.com/features/2017-blackstone-steve-schwarzman-interview/?utm_source=Daily+AR&amp;utm_campaign=423ccc88a9-RSS_EMAIL_CAMPAIGN&amp;utm_medium=email&amp;utm_term=0_c08a59015d-423ccc88a9-140324189">Interview with Steve Schwarzman</a>: Steve Schwarzman is the Blackstone co-founder, chairman, and chief executive officer. In this interview, he shares his learnings from decades of investing in private equity deals across the global markets. Blackstone has $368 billion assets under management and is a major private equity fund in global markets. &nbsp;</li><li>Daniel Schwartz, a 36-year old who turned around the global fast-foot chain Burger King by understanding&nbsp;the operations of the business from cooking burgers and cleaning toilets at a Burger King restaurant in Miami, Florida and by simply walking around. Learn more about his incredible story in his <a href="http://www.businessinsider.com/how-wall-street-prodigy-daniel-schwartz-saved-burger-king-2017-6">public profile</a>. &nbsp;</li><li>As Ethiopia becomes increasingly integrated into global supply chains, an executive should understand the global economy in an effective way. Avondale&nbsp;Asset Management posts frequent&nbsp;<a href="http://avondaleam.com/company-notes-digest-6-9-2017/">commentaries</a>&nbsp;by global CEOs and CFOs and finds out their views on the global economy. You can subscribe to Avondale's commentaries&nbsp;<a href="https://avondaleam.us2.list-manage.com/subscribe?u=01d425b8d26d70d5169b67771&amp;id=76c97944c3">here</a>. &nbsp;</li><li>The Internet is changing the world and is slowly evolving into a utility like power, water and other services. These changes are shaping economies and businesses across the globe. &nbsp;<a href="https://dq756f9pzlyr3.cloudfront.net/file/Internet+Trends+2017+Report.pdf">Mary Meeker's report on Internet Trends 2017</a> highlights this important resources trend. Mary Meeker is a partner at the Silicon Valley venture capital firm Kleiner Perkins Caufield &amp; Byers.</li></ul><figure class="image image_resized" style="width:98.76%;"><img src="/uploads/world_network_1_1_0_472c15fd82.jpg"><figcaption>Source: <a href="http://www.terem.com.au/blog/should-australian-innovators-be-connecting-to-global-markets-sooner-2/">Terem Technologies</a></figcaption></figure>

Take a few minutes to look at global markets like industry leaders do

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Resources on Global Markets

<h1 style="text-align:center;">The Economic Outlook of Ethiopia: An Overview</h1>Working in Ethiopia, we experience firsthand the economic challenges and opportunities faced by the country. Recently, two reports were published which outline the current economic state of Ethiopia and Sub-Saharan Africa. These reports give a great snapshot of the economic stability in Ethiopia, and the current outlook for opportunities and risks going forward in 2017 and beyond.The World Bank Group took a holistic view of Sub-Saharan Africa and found that growth within this region is recovering due to “rising commodity prices, strengthening external demand, and the end of drought in a number of countries” (World Bank, 2017). In the coming year, it is expected that growth within Sub-Saharan Africa will increase to “2.6 percent in 2017 and 3.2 percent in 2018” due to rising commodity prices and improvements to macroeconomic imbalances. Growth on output over the next three years is projected to be at 0.7%, a level where we are not likely to meet the poverty reduction goals within the region.When focusing on Ethiopia specifically, however, the report was more positive. The World Bank Group claims that countries which are non-resource intensive should have positive growth due to support from “infrastructure investment, resilient service sectors, and the recovery of agricultural production” (2017). Ethiopia particularly is slated to expand by 8.3% in 2017, 8.0% in 2018 and 7.9% in 2019, largely due to public investments. The country somehow maintains its position with the fastest and highest growth rate forecasted for any African country, followed by Tanzania and the Ivory Coast.UNDP takes a slightly more negative stance on the economic outlook over the next year, due to continued drought in parts of the country (as a result of the El Niño) and increased fuel prices which put added “pressures on inflation and foreign exchange reserves” (UNDP, 2017). UNDP found that Ethiopia’s economic growth in 2015/16 slowed down to 8%, compared to previous years where growth was around 10%. Currently, the service sectors and government expenditures are the primary reasons for the continued growth for the country.<figure class="image image_resized" style="width:99.22%;"><img src="/uploads/screen_shot_2017_06_30_at_6_35_34_pm_0_1987176991.png"></figure>One major growth driver on the demand side was government expenditures. In 2015/16 these expenditures grew to 27.2%, “gross domestic savings grew by 21.4 percent and savings as percent of GDP reached 22.4 percent and gross capital formation was 28.4 percent” (UNDP, 2017). These indicators show an investment and saving gap of 16.1% of GDP. One of the main sectors affecting the country’s export earnings is the agricultural sector. In Ethiopia, this sector accounts for 73% of current workforce and generates 70% of export earnings.During the first quarter of 2016/17, inflation appears to have been contained. There has been general increases to the price of goods at 8.5%, price of food is up 9.8%, and other items by 7.3% (UNDP, 2017). These food increases include Ethiopian staples such as wheat, teff and sorghum. Inflation price of food is usually due to the “seasonality in agricultural production” (UNDP, 2017). Interestingly, inflation usually occurs during May to October and deflates after the main harvest in November.The Ethiopian Birr is still slowly deprecating at a rate of 6.4%. When the UNDP published the report, the Birr was exchanging at 22.81 Birr to 1 USD. The Real Effective Exchange Rate however shows the Birr appreciating in the second quarter 0f 2016/17. Money supply growth was also up during this period by 25.1% on an annual basis, compared to the same time last year, where it was at 21.7%. The main contributor to this increase was the growth in credit over the past year.During the second quarter, exports of merchandise totalled USD 575 million, which is 20.5% lower than the same time as last year. This is due to international prices of goods declining and supply constraints affecting items such as: oilseeds, gold, flower, and leather. Imports into the country also decreased by 6% to USD 3.9 billion. This decrease, alongside rising fuel costs, indicates a lack of available foreign currency.“Export performance remains to be the challenge of the Ethiopian economy” (UNDP, 2017). The diversification is low since agricultural exports account for 70% of items exported, and manufactured products at 4%. In order to increase performance in this area, a heavier emphasis needs to be placed on exporting processed items such as leathers and textiles.These two recent economic reports paint an outlook for Ethiopia that identifies the challenges but is still hopeful. Despite the country’s slowed economic growth, it is still ahead of all other countries in the region. Upcoming challenges, including extended droughts for parts of Ethiopia, will continue to challenge the economic outlook and will add to the pressure “on domestic prices (inflation) and trade balance as import of food will be required” (UNDP, 2017).For more in-depth information on Ethiopia, the two economic briefs can be found here: <a href="http://pubdocs.worldbank.org/en/710231493655506452/Global-Economic-Prospects-June-2017-Regional-Overview-SSA.pdf">A Fragile Recovery Jun3 2017 World Bank Group</a> <a href="https://www.dropbox.com/s/g15sllurj3hrv27/Quarterly Economic brief 2017-1 (3).pdf?dl=0">United Nations Development Programme Ethiopia Volume 1 2017</a>

A look at the UNDP Quarterly Brief on Ethiopia and WBG’s Global Economic Prospects

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The Economic Outlook of Ethiopia: An Overview

<h1 style="text-align:center;">What Does Good Look Like?</h1>If we look at RENEW as a manufacturing line, our job is to take businesses of all shapes and sizes in on one side and take them through a process that helps them be number one or two in their market. After almost a decade in the making, RENEW launched two programs this week with this aim in mind. For years, RENEW has seen common challenges in the C-suite across hundreds of companies in sub-Saharan Africa. A lot of the similarities come down to a lack of disciplined management team - not creating or using annual plans or budget; not closing the books every month; not looking at cash flow; not following up with key customers, etc. We don’t think it’s for lack of desire on the part of the executives we work with, we think it's typically a lack of understanding about what good looks like.<figure class="image"><img src="/uploads/cfo_100_1_c3746ccc2e.jpg"></figure>With gratitude to the Canadian Government for their support, we launched The Executive's Program and The CFO 100 aimed to build disciplined management teams across our portfolio and a few other companies that have been hand-selected by you and the team at RENEW.The Executives' Program is essentially a mini-MBA. Every Tuesday morning for two hours, a group of some of Ethiopia's finest will spend time learning about practical topics that managers need to know: how to run effective weekly management meetings; how to recruit, onboard, compensating and evaluate senior member of your team; how to understand financial statements and learn the key financial metrics every executive must care about; how to communicate to shareholders and prepare quality investor reports; how to manage a sale pipeline and run successful sales calls, etc. Over the next five years, we'll graduate 50 top executives - many of whom will be leading the companies you have invested in.The CFO 100 is simple - teach the fundamental skills of being a CFO, including how to build and use a budget; how to manage cash flow; how to analyze financial statement; how to prepare financial reports for the CEO and shareholders. Fundamental things that are deeply lacking in the education system in Ethiopia and many other countries. Over five years we aim to graduate 100 CFO. Yes, many of them will be working at your portfolio companies. We're already getting calls from the other investment firms in Addis asking us to let us know when the class graduates. The demand is high.<figure class="image"><img src="/uploads/what_good_looks_like_27eb9296c4.jpg"></figure>So stay tuned and check in on how these two programs are progressing. We hope that will not only add value to your portfolio companies (priority #1), but will also become a part of our legacy here in Ethiopia. We want our trainings to be a key part of RENEW's unique value to attract the best deals and realize breakout growth.

RENEW Launches The Executive's Program and CFO100

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What Does Good Look Like?

<h1 style="text-align:center;">5 Resources to Have in Your Success Kit</h1>With the changing global scenario, it is important for individuals to be one step ahead. The following five important resources will help companies and individuals to perform better:<a href="http://firstround.com/review/how-to-become-insanely-well-connected/">How to Become Insanely Well Connected</a> by Chris Fralic details key strategies that helped him to become a highly-connective networker. The best way to be highly influential is to be human to everyone you meet. The article describes how to boost your career forward, the do’s and don’ts for receiving responses from influencers and, how to measure your performance.<a href="http://www.bain.com/publications/articles/global-private-equity-report-2017.aspx">The BAIN Global Private Equity Report 2017</a> outlines the changing global economic scenario and explains how Private Equity continues to remain the most demanded asset among the institutional investors who are looking for long-term investments.<figure class="image"><img src="/uploads/board_room_1_7b04b1309f.jpg"></figure>In the stressful corporate world, where travel is quite frequent, sleep really matters. In the article <a href="https://www.nytimes.com/2017/03/10/opinion/sunday/can-sleep-deprivation-cure-depression.html?utm_source=pocket&amp;utm_medium=email&amp;utm_campaign=pockethits&amp;_r=3">Your Sleep Schedule is Making You Sick</a> Richard Friedman outlines ways to align your lifestyle to have a sound sleep.Most Wall Street analysts and investors focus on Return on Equity (ROE) to measure their company’s performance. However another metric, which is often overlooked by executives and investors, is Return on Assets (ROA) to analyse the long-term profitability trends. You can read more about the latest trends in <a href="https://hbr.org/2010/03/the-best-way-to-measure-compan">The Best Way to Measure Company Performance</a>Lastly, <a href="http://intrinsicinvesting.com/2017/04/04/how-moats-make-a-difference/">How Moats Make a Difference</a> outlines the different kinds of moats and the kinds of opportunities available to these moats. The most important aspect of investment approach is to focus on companies that possess a competitive moat. There are different kinds of moats within the firm’s business model which gives rise to competitive advantages.

RENEW explores five articles that will help companies and individuals to perform better

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5 Resources to Have in Your Success Kit

<h1 style="text-align:center;">5 Steps to Help You Prepare to Meet Investors</h1><figure class="image"><img src="/uploads/dsc_0113_fotor_e5a847f136.jpg"></figure>In developed and emerging economies, private equity investing is a key source of capital. This source of capital is becoming more recognized in Sub-Saharan Africa. This is a relatively new concept for many entrepreneurs in Ethiopia, and as a result, companies still run into problems finding and attracting this type of capital. With this in mind, it’s important to learn how to prepare, and how to put your best foot forward when meeting investors for the first time:1. Educate Yourself&nbsp;- Learn about what it means to take on an investor. There are various ways to do this including online research.&nbsp;<a href="http://www.investopedia.com/">Investopedia</a>&nbsp;is a good place to start! Another way to educate yourself is to come to one of RENEW's Private Equity Seminars. See upcoming dates.2. Know Your Numbers -&nbsp;Investors will always question you to see if you know your numbers. What was your revenue last year? By what percent did it grow from the year before? How much does it cost to make your widget? How much do you sell it for? These are the basics you must know.&nbsp;3. Prepare Your Pitch&nbsp;- Investors expect you to have a clear, concise pitch that makes sense. Practice makes perfect, so use this template and practice, practice, practice.4. Prepare Your Space -&nbsp;If you aren't sure what investors are expecting, see what images you can find on google for your industry and do the best you can to make sure your space looks clean, safe and busy! If you aren't quite up to international standards (and many aren't), it's ok, but make sure to communicate to potential investors that you know what good looks like and you are working towards it.&nbsp;5. Watch Shark Tank -&nbsp;There's nothing better than learning from other people's successes and failures. We recommend watching&nbsp;at least 1 episode of&nbsp;<a href="http://abc.go.com/shows/shark-tank">Shark Tank</a>,&nbsp;<a href="http://www.bbc.co.uk/programmes/b006vq92">Dragon's Den</a>&nbsp;or&nbsp;<a href="http://www.cnbc.com/the-profit/">The Profit</a>&nbsp;each week in preparation to meet investors.&nbsp;Think you are ready? If you haven't already done so, plan to attend an upcoming RENEW Private Equity Training. Members of RENEW's Impact Angel Network will be coming to Addis Ababa to meet with investors&nbsp;September 17-23, 2017&nbsp;and February 18-24, 2018. So get ready.Want to know what previous IAN investors have said about Ethiopia? See our blogs by Beth Marquette, Jeff and Donna Turi and Andrew Umhau.&nbsp; &nbsp;

How to put your best foot forward when meeting investors for the first time

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5 Steps to Help You Prepare to Meet Investors

<h1 style="text-align:center;">7 Insights to Win and Keep Customers</h1>Over the past five years of investing in small and medium enterprises (SMEs) in Ethiopia, RENEW has observed that one consistent challenge faced by many companies is to build a sales department with the discipline and skills needed to rival Western companies.Sales and marketing are key areas where we work to add value when managing our portfolio companies. Over the years we have gained a lot of first-hand experience on what has and hasn't worked. One thing we are certain of is that most of the SMEs in Ethiopia don’t give the necessary attention and importance on developing sales teams and system they need to win and keep customers.Sales is the most important activity in each and every business, it comprises the process of acquiring customer up to closing deals! Without customers, there is no business. The ability to attract and retain customers is a key differentiator that helps turn SMEs into market leaders.Last week, RENEW hosted an event for selected Ethiopian business executives titled Strategies Successful Companies Use to Win and Keep Customers.We highlight below some key takeaways of that workshop. Many of the world’s fastest growing companies make use of these strategies: 1. Spend time on lead generation and the systems to track them&nbsp; 2. Apply methods to qualify your leads 3. &nbsp;Increase your customer touch points 4. Under promise, over deliver&nbsp; 5. Selling more to existing customers is more profitable than acquiring new customers 6. It takes 12 rights to make up for 1 wrong with a customer, so do it right! 7. Learn what your customers want; be obsessed with your customerOne of the key discussions a team should be having related to sales is how much time a company should spend attracting and converting strangers into potential leads. At RENEW, we would say typically a lot! This is an area where the marketing team overlaps with the sales team. Not less important is the process of qualifying the leads. There are many methodologies out there that companies have been using for decades. For example the well-known <a href="https://cloudkettle.com/bant-a-dead-easy-method-for-qualifying-leads/">BANT method</a>, that IBM started using 30 years ago. It is still a very effective way to understand if your lead has&nbsp;budget/money&nbsp;to pay,&nbsp;and the authority&nbsp;to make decisions, and whether the organization or customer has a&nbsp;need&nbsp;for your product/service.&nbsp;<figure class="image"><img src="/uploads/7_strategies_aa3bedb3e4.jpg"></figure>After you qualify a lead, it times to plan the steps to close the sale. One of the most effective ways to do this is to increase the touch points you have with your potential customers. According to some research it takes 7 to 11 touch points on average to close a deal. Planning your touch points is a proven technique that increase conversion rates substantially, and makes a company stand out from the competition.One of the mantras every sales team should remember is under promise and over deliver, the so-called FedEx Rule. It is a key strategy to improve customer fulfilment.&nbsp;&nbsp;Get this right as studies show it takes on average 12 positive actions to make up for 1 wrong. It is very costly to make up for a mistake during the customer journey.Sales and marketing teams should be obsessing about the customer, including ensuring systems are in place to retain them. Repeat customers are the most profitable, costing a company six to seven times less than acquiring a new one and spending 67% more than new customers (*).&nbsp;Sales and Marketing are essential activities in all businesses both in business-to-consumer (B2C) and business-to-business (B2B) models. The difference is often that in B2C sales serves marketing and in B2B marketing serves sales. In any case, the gist is that marketing and sales are very different functions and each should be given the importance it deserves. In many businesses in developing countries, such as Ethiopia, the sales process is often more reactive to market demands than proactive. Companies that are applying strategic approaches to their sales efforts will out perform the competition, especially in markets that are growing in double digits for the past decade.<a href="mailto:renew@renewcapital.com">Contact us</a> to find out about the next sales seminar.-------(*) Source:&nbsp;Bain &amp; Company, (research done by Frederick Reichheld of Bain &amp; Company cited in HBR 2014 article <a href="https://hbr.org/2014/10/the-value-of-keeping-the-right-customers">“The Value of Keeping the Right Customers” </a>by Amy Gallo.

RENEW shares 7 insights to Win and Keep Customers, that won’t require any additional investment

Founder Resources