Proposals will be assessed through a three-round process:
Round 1 – Concept Note Phase: Consists of an initial call for concept papers followed by a review and selection process by international and diaspora business experts. Following Round 1, a limited number of applicants will be invited to submit full business plans.
Round 2 – Business Plan Phase: Consists of the development and submission by semi-finalists of full business plans. Plans will be submitted to ADM III and distributed to judges for review and selection of finalists.
Round 3 – African Business Expo and Awards Event: Consists of a final competition and awards event held in Washington, DC, during which finalists will participate in an exhibition of business concepts and one-on-one interviews with ADM III finalist judges. Awards will be announced at the conclusion of the event, after which there will be an orientation session for awardees.
In the 6-8 week period post the Washington D.C awardee announcements, apparent awardees and their associated companies will undergo a ‘due diligence’ process (see below). A grant agreement would be signed within 3 months post the award event. Disbursements will be completed within one year of the signing of the grant agreement, during which time quarterly reports will be required. Please note that the ADM team will request quarterly reports in the subsequent year to further determine the value of the mechanism and support future investment activity.
Proposals for Round 1 – Concept Note Phase and Round 2 – Business Plan Phase will be assessed according to the following Evaluation Criteria, with respective weightings shown in parentheses.
Business Idea (25%): Business proposals must demonstrate a well-thought out idea and model that has the potential to be profitable, sustainable and generate economic development in any eligible sector (Click here for ineligible). Successful proposals will clearly articulate how the proposed product, service, or business model is more compelling than existing ones and how the business idea can improve or enhance their customers’ lives, the business and the community. Acceptable business proposals should explain how Information and Communications Technologies (ICT) will be used in their business operations.
Operations and Results (20%): ADM is looking for applicants with an operating plan that can work in the short term, and that has the potential to scale to national, regional and/or international levels. Proposals must outline a realistic operational plan that includes clearly stated objectives and goals, a strategy for effectively deploying limited resources to achieve the goals and an action plan associated with the delivery of product or service. Proposals should demonstrate the ability to achieve tangible results in terms of business growth and economic development during the ADM III grant period and beyond. Information regarding existing operations in the country of implementation, if any, should be provided. It should define relevant outcome indicators and targets such as production, sales, direct and indirect jobs created, increased wages, energy access, information access, etc.
Management Capacity (25%): Proposals must demonstrate the team’s capacity to successfully implement and grow the business in the local context. Evidence will include information regarding the team composition, relevant qualifications, and demonstrated track record of success and types of management systems (financial and other) used to manage and business. Proposals must demonstrate the ability to leverage existing applicant resources in terms of operations, financing, expertise and networking. Proposals should also explain the depth and strength of the relationship between the U.S.-based applicant and the local entrepreneur(s)/enterprise as well as any utilization of external resources.
Financial Sustainability (15%): Concept papers must outline a financial business model that is realistic in the local context/market in the near and medium term, and a strategy for long-term viability. Plans must be based on realistic financial business model projections of expense and revenue streams. The proposal must provide a realistic strategy to secure additional financial support beyond the life of the ADM III period.
Funding and Leverage (15%): Proposals must well describe how the grant funding will be used, and should demonstrate a minimum of one-to-one leverage ratio of applicant contributions to ADM III grant funding. Proposals that offer to leverage beyond that are viewed favorably. At least some portion of the matching contribution must be in the form of a financial contribution. In addition to monetary contributions, in-kind resources such as property, equipment, and supplies are also valuable contributions. Applications must clearly specify the contributions of each party and indicate the cash value of in-kind support. Labor will not qualify as ‘in-kind.’
For Round 3 (up to 25% bonus), applicants selected as finalists will be asked to travel to Washington, D.C. to exhibit their company/idea and participate in an exhibition that will be reviewed by judges. At this time applicants will personally share their business case and how the grant will be most productively used. In a second interview, judges will separately interview applicants to better understand the applicant’s particular business environment, opportunities and challenges in this environment, and how the applicant would address these opportunities and challenges.
As part of this finalist Round, applicants will be expected to bring the following documentation:
Legal Business Registration/Articles of Incorporation (could be ‘provisional’ if process is underway; must be provided by awardees before signing of grant agreement, period TBD.)
Proof of ownership of business; partnership agreement, if applicable
Evidence of patents, if applicable
Certifications, permits and/or licenses
CV’s of all company principals with business references and contact information as well as letters of commitment.
Prior to the signing of a grant agreement between the awardee and USAID, awardees and the local African company will undergo a questionnaire and a one-day on-site Due Diligence process to validate key elements of the business plan. During this due diligence process, and at the latest during the site visit, the ADM representative and awardee will agree to a disbursement schedule, predicated upon achieving pre-defined/agreed milestones and/or key performance indicators. A ‘Know your Customer’ form will be completed at this time. A preliminary Environmental Compliance assessment will be made as well (see below). It is expected that the Due Diligence process will occur in the 6-8 week period post the award announcement.
USAID encourages corporate environmental responsibility. As such, grantees must comply with host country environmental regulations unless otherwise directed in writing by USAID. In case of conflict between the host country and USAID regulations, the latter shall govern.
During ‘due diligence,’ the business plans of apparent awardees will be assessed for environmental risk. Those plans involving support for activities with potential for negative environmental impact will be subjected to the Africa Bureau Environmental Screening and Review Process which is described in the Africa Bureau’s Environmental Guidelines for Small-scale Activities in Africa. The Guidelines can be found at http://www.encapafrica.org/index.htm
Please note that certain businesses that have been determined to have the potential for negative environmental impacts may need to preparea brief Environmental Review Form/Report (AFR Environmental Review Form Word 260KB) and, as appropriate, an Environmental Mitigation and Monitoring Plan. For additional guidance on ADM Environmental Procedures, See http://www.usaid.gov/our_work/environment/compliance/summary-216
The signing of a Grant Agreement that includes the milestones, key indicators and disbursement schedule is the next step. It is expected that this would occur by the end of TBD. All disbursements should be completed at a date TBD.
Reporting during the Grant Period
Awardees will be required to report progress against the agreed milestones/KPI’s on a quarterly basis, as well as provide an Income Statement, during the one-year grant period. A balance sheet will be required semi-annually.
Reporting ‘post’ the Grant Period
ADM recognizes that the magnitude of the value of its grants will not necessarily be recognized in the one-year grant agreement period. Defining the is value is important however to not only sustain this program but to more importantly help document the value of USAID investing in diaspora African entrepreneurs and their companies in Africa. USAID will therefore request awardees to participate in a post grant agreements that would enable the continued tracking of the companies’ progress.