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Terminology, Definitions & Glossary of BiD Network

BiD Definition List

BiD Network Foundation makes use of standardised terminology in its agreements and general terms and conditions. The definition of this terminology is described below.

GENERAL

Definition List

List with explanation of BiD Network’s terminology used in agreements and in general terms and conditions. click here

BiD Network, BiD Network Foundation, Business in Development Network

These are all acceptable expressions for the organisation formally know as: Stichting Business in Development Network or Business in Development Network Foundation, founded on December 28th, 2006 and based in Amsterdam, the Netherlands.

Business Plan Classification or Business Plan Rating

Business propositions within the BiD Network community are qualified using dots. These dots are clearly visible in the heading of every business plan.

  • When a plan application has no dots, it has not been assessed nor does it have a completed business plan attached.
  • When a plan application has one dot it has a complete business plan attached.
  • When a plan application has two dots, the full business plan and financials have been accepted in the Business Plan Assessment
  • When a plan application has three dots it is accepted by the Approval Committee for matchmaking and is therefore a BiD Grade Plan.

When a plan application has had a Background Check it will be added to a Set of Plans that have reached this status.

BiD Challenge

The brand name of BiD Network Foundation used for national and international business plan competitions. Also see article 5 of the General Terms and Conditions click here

Bidnetwork.org and BiD online community

All people and organisations who have registered on the bidnetwork.org website (www.bidnetwork.org) and who have an interest in promoting business and entrepreneurship in new emerging markets. Also see article 2 of the General Terms and Conditions click here

Plan Application

A plan application s a three-page business proposal by an entrepreneur filled out in a pre-fixed format on www.bidnetwork.org. It is a short overview of the business proposition, the skills and experience of the entrepreneur and the development impact of a plan. This page is connected to the entrepreneur and used to attach business plans and other documents and for matchmaking and assessment purposes.

Business Plan

A Business plan is a complete business plan which consists of a textual part (the business proposition, the skills and experience of the entrepreneur and the development impact) and a financial template (financial projections of balance sheet, cash flow and a profit and loss statement for a 3 year period). also see article 4 of the General Terms and Conditions click here

Investor Matchmaking

All activities by BiD Network aimed at bringing together entrepreneurs and investors to get businesses financed. These activities include preparing entrepreneurs and investors for an investment, assessing business plans peer networking etc. The focus is on equity finance for SMEs. Also see article 8 of the General Terms and Conditions click here

New Emerging Markets

Those Developing Countries listed on the OECD DAC list with a favourable political and economic environment for business en foreign investments.

COMMUNICATION

Brand Guide

Documents, available on-line and on disk, containing guidelines for all promotional expressions, referring to the name, logo, activities or members of BiD Network. The guide also contains samples, templates, pictures and logo's for use with promotional expression. National partners are advised to consult the brand guide before printing or publishing any materials.

ASSESSMENT

Ongoing procedure

By origin BiD network achieved its goal by organising a yearly international business plan challenges. These BiD Challenges have a yearly cycle an prizes were awarded once every year locally and once every year internationally. This changed after the 2007 Challenge. Now business plans can be submitted at any time and they will be assessed and returned to the entrepreneur with feedback within 20 working days (fully implemented by the end of 2008).

Assessment procedure

Standardised procedures and on-line support platform to assess business plan applications and business plans both locally and in Amsterdam and give structured feedback to the entrepreneurs.

Assessment environment

Web based tools in bidnetwork.org assessing business plans and plan applications. This environment is used by Assessors and Account Managers.

Pre-assessment

Pre-assessment is the assessment of the plan applications against pre-assessment criteria. The pre assessment criteria are the following:

  • The business plans must be written in English or in Spanish;
  • The Country of Business must be a developing country;
  • The business has a financing requirement of between US$10,000 and US$1,000,000;
  • The business must aim to be a profitable business in the next three years;
  • The business can double its sales or direct employees within three years;
  • The business is not involved in any of the ‘Exclusion Criteria’; (for details see article 4 of the General Terms and Conditions) click here

Pre-Assessor

Is someone with sufficient rights on bidnetwork.org to reject a plan application based on the pre-assessment criteria.

Plan Application Assessment

Plan application assessment is the evaluation of a plan application. The plan application assessment consists of two steps: a plan application recommendation by an Assessor and; the (final) plan application assessment by an Account Manager. During the Plan application recommendation the Assessors (of the local or sectoral organising partners) give an advice to accept or reject a application. He/she assesses the plan according to the Assessment criteria of the BiD Network and provides the plan with feedback.

An Assessor is usually a staff member of a BiD National Partner. An assessor recommends to accept or reject a plan.

In the (final) Plan application assessment the Account manager decides, according to the Assessment criteria whether to accept or reject the plan and also provides feedback to the entrepreneur.

An Account manager is usually a member of BiD Network Foundation staff, generally based in the Netherlands.

The Assessment criteria are the criteria against which a Plan application as well as a complete Business Plan is checked. These criteria have to be covered adequately in the Plan Application and fully in the complete Business Plans, to be accepted in the BiD Network Assessment . The criteria cover the Business, entrepreneur, feasibility and development impact of a plan.

Business Plan Assessment

The Business Plan assessment focuses on the evaluation of a complete business plan. The (final) business plan assessment is done by the Assessor and Account manager.

The Assessors recommend plans for acceptance or rejection and provide feedback for the entrepreneur.
The Account Manager gives the final accept or reject verdict on a plan.

Opinion

An Opinion is a text of approximately 200 words, filled out by the Account Manager, motivating the reason why a plan should be approved by the Approval Committee of BiD network.. This sheet contains information on the proposed acceptance of the business plan as a ‘BiD grade’ plan and why the Account Manager believes it is fit for matchmaking.

Feedback

After every round of assessment the Account Manager collects the remarks placed by the assessors and writes feedback for the entrepreneur. This feedback is structured through the assessment environment, sent per email to the entrepreneur and filed for reference purposes.

COACHING

Coach

A coach supports an entrepreneur on a one-to-one basis. Most coaches work on a volunteer basis. There are two types of coaches, 'review coach' and 'implementation coach'. A coach is affiliated to a partner of the BiD Network or to a National partner and is accredited by the BiD Network.

A coach has:

  • the ability to be a motivator, sparring partner or gateway to knowledge and expertise for the entrepreneur;
  • knowledge of business development, financial planning or marketing and sales;
  • proven affinity with development issues and developing countries;
  • a personal or professional interest in small business development (SME) in developing countries.

Review coach

Assists an entrepreneur with writing a complete business plan. The maximum period of activity is 90 days. In general a review coach contributes 20 hours to coaching the entrepreneur. A review coach must follow the on-line coach training on the BiD Network and can opt to follow an additional live training organised by a BiD National partner or the BiD Network in the Netherlands.

Implementation coach

An implementation coach assists an entrepreneur with the local implementation of their business plan. The coaching period and amount of hours contributed by the coach are to be determined by the coach and the entrepreneur. Until further notice implementation coaches are matched to entrepreneurs off line by the BiD Network or national partners.

Expert

Professionals that provide the BiD Network with second opinions during business plan assessment, making use of specific and/or in-depth expertise that the BiD Network staff do not have. They can also provide expertise to other coaches and have access to the coach matching environment. Experts are accredited by the BiD Network. An expert commits at least 6 hour per year on an ad hoc basis.

Coachable entrepreneurs

An entrepreneur that meets the BiD Network assessment criteria and has specifically indicated that they want a coach on their plan application. Coachable entrepreneurs are accredited by the BiD Network.

Coach-matching environment

The pages on bidnetwork.org where review coaches and coachable entrepreneurs can find eachother.This environment is only accessible for accredited review coaches and coachable entrepreneurs. Review coaches and experts can also consult each other through the environment.

REGIONAL PARTNERSHIPS

National Partner

A National Partner is our main representative in a country or a region. NPs have exclusive regional rights. All deal flow, assessment information and progress reports within their region are shared with the NP's. Other providers can be appointed in the same region, but they have no exclusive rights.

Sourcing agent

Trusted service provider who sources BiD Grade plans. They are assigned specifically to source plans, they are not a BiD representative and have no exclusive regional rights.

Funding Agent

Trusted investor network, investor group or intermediary who actively involve their investors to invest in BiD Grade Plans.

Equity services provider

Trusted service provider, accredited by BiD Network. They offer specialist services for investors for due diligence, contracting, representation, monitoring and mentoring.

Sector Challenge

Is an international business plan competition for a specific industry or theme, whereby entrepreneurs, investors, customers and suppliers meet on a national and/or international level.

Memorandum of Understanding (MoU)

Is a contract between BiD Network and a partner, agent or service provider dealing with deliverables, terms & conditions, rights & responsibilities, communication and payments. The MoU overrides all other documents, guidelines, contracts and terms & conditions.

Acceptable work plan

Within 30 days after signing a MoU, the partner, agent or service provider will submit a work plan containing at least:

  • a financial budget
  • allocation of resources (personnel)
  • a planning of events and results

The work plan must be acceptable to the BiD Network Area Manager.

Area Manager

BiD Network employee responsible of all National Partners in a given area.

MATCHMAKING

Approval Committee

The Approval committee is the last phase of the Assessment procedure and the goal of this Committee is to decide if a plan can be considered ‘BiD Grade’ and is therefore presented to matchmaking. The members of the Approval Committee are members of the board of directors of BiD Network.

BiD Grade Plan

Is a plan that has been approved by the BiD Approval Committee. The BiD Approval committee approves plans which it thinks are presentable and attractive to BiD Network investors. When the BiD Approval Committee estimates that there is a 25% chance that the plan can be financed, it is approved. This is a non-criteria based decision. Prior to the Approval Committee an Account Manager prepares an Opinion on the business plan to recommend it for approval by the Approval Committee.

Background Check

Before investors enter into exclusive negotiations over approved business plans (BiD Grade Plans), a Background Check has to be performed. This background check is done by the National Partner or sourced out to a service provider and contains the following elements:

  • Verified identity of the entrepreneur(s);
  • Obtain and verify registration of the company;
  • Obtain and verify latest statement of accounts;
  • Verify ownership of major assets and debts;
  • Check for criminal records;
  • Check for bankruptcy and extensive tax debt;
  • Check for credit history if available;
  • Report on visit of premises and interview with the entrepreneur(s)

Equity Finance

A form of finance whereby an investor finances a company in return for shares in the company. An investor expects to receive a dividend per share when the company makes a profit. The investor also expects to sell his shares for a higher price than he bought them at some point in the future. This sale of shares is called the “Exit”. There are variations on Equity and debt. Examples are subordinated loans or convertible loans.

Investor

An investor can be a private individual, group of individuals, company, fund or institution willing and able to invest part of their resources in entrepreneurs in return for a share in the profits. Also see article 7 of the General Terms and Conditions click here

Entrepreneur

An entrepreneur is a natural person who initiates and manages a new or existing business. An entrepreneur is always (partly) owner of the business. Also see article 3 of the General Terms and Conditions click here

Investor Level

A Level 4 Investor

is just a visitor to our public website. This investor has not expressed his or her interest as an investor. Like any visitor these investors are subjected to the general terms and conditions. They have to pay a success fee if they invest in a BiD Network entrepreneur.

A Level 3 Investor

has expressed his or her interest by filling in the "expression of interest form". Identity and investment preference are known by BiD Network. These investors are subjected to the general terms and conditions and they have to pay a success fee if they invest in a BiD Network entrepreneur.

A Level 2 Investor

has signed an "investor agreement" and met with the matchmaking team. These investors have access to the secure investors portal with all current investment propositions and get a more lenient success fee arrangement.

A Level 1 Investor

has signed a custom investor agreement. This level is reserved for special investors like funds and private investors who invest frequently or with more than USD 1 mln p.a. through BiD Network.

Expression of Interest

Simple on-line form in which any investor can express his or her preferences for investments in new emerging markets. And investor can file more than one expression if necessary. An expression of interest is free of charge and does not result in additional obligations. It is used for finding the most suitable investor for a specific business plan.

Level 2 Investor Agreement

An official agreement between BiD Network and an investor or fund. See Investor Level.

Investor Letter of Intent (LoI)

Once an investor and entrepreneur are matched and they decide to enter into negotiations a Letter of Intent is offered by BiD Network, to be signed by both the investor and the entrepreneur. The Letter of Intent covers the rules of engagement between you and the entrepreneur. It covers issues like confidentiality, exclusivity and time frames.

Investor service level agreement (SLA)

The Investor Service Level Agreement covers the services that an investor may expect from BiD Network with regards to fact finding, support in negotiations and local law and customs.

Term Sheet

Negotiations between an investor or an entrepreneur should either result in a Term Sheet (containing all details of the prospective investment and terms for due diligence) or the negotiations eventually end.

Business Financed

A Business is considered Financed when the need for finance has been adequately fulfilled in order for the business to continue its growth path. Business can be financed either by Bid Network (prize money), though BiD Network (active role in matchmaking) or via BiD Network (no active role, only support and network).

Do’s and Don'ts in terminology

Don'ts Do’s
Screening Assessment
Satellite Partner National Partner
Investment Committee Approval Committee
Developing countries New emerging markets
Target Country Country of Business

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