Methodology DRS-2.0
Measuring transaction readiness, not the quality of an investment.
The DealReady Score™ answers a single question: how ready is this company, really, to present a financing transaction to institutional investors?
Six pillars, one hundred points
| Pillar | Weight | Central question |
|---|---|---|
| Financial Readiness | 25 | Can the numbers and forecasts be trusted? |
| Strategic & Business Readiness | 15 | Does the company present a defensible economic proposition? |
| Governance Readiness | 15 | Do governance, management and compliance withstand due diligence? |
| Transaction Readiness | 20 | Is there a clear, coherent and structured transaction? |
| Documentation Readiness | 10 | Can the file be opened and audited quickly? |
| Investor Readiness | 15 | Can management defend the file in front of investors? |
Each of the 50 criteria is rated from 0 to 4: 0 Critical / Absent, 1 Weak, 2 Developing, 3 Ready, 4 Institutional Grade. A criterion’s points equal weight × effective rating / 4. A 4/4 keeps the same meaning whatever the size of the company: it is an institutional level.
Narrative creates a hypothesis. Evidence creates confidence.
A score cannot depend on the executive’s statements alone. For each criterion, evidence is assessed on four dimensions: availability (0–2), reliability (0–2), recency (0–1) and consistency with other documents (0–1). The resulting evidence tier, E0 to E3, caps the effective rating: without evidence, a criterion cannot exceed 1/4; with complete, reconciled evidence, it can reach 4/4.
The Evidence Confidence Index™ aggregates this evidence quality out of 100. It separates an Indicative DealReady Score™, essentially self-declared, from a Verified DealReady Score™, obtained after documentary review, consistency checks, analyst review and examination of the Critical Gates. No automated tool grants verified status on its own.
Ten Critical Gates™
An arithmetic average must never hide a fundamental defect. Ten conditions are examined separately and rated Green, Amber or Red:
- Clear legal and beneficial ownership
- Sufficiently reliable historical financial information
- Liquidity, cash generation and debt service not structurally impaired
- Material tax and legal risks identified and controlled
- Shareholder alignment on the transaction
- Coherent funding amount and use of proceeds
- Defensible valuation
- Consistent and traceable information
- Valid operating licences and permits
- Acceptable integrity and compliance profile after KYC
One red gate caps the final level and requires remediation. Two or more red gates: the company is not ready for institutional outreach, whatever its score. A Deal Breaker (fraud, unestablished ownership, hidden major litigation, major regulatory breach) must be resolved before any investor approach.
Six levels and a rule of minimum
| Level | Score | Meaning |
|---|---|---|
| DR1 | 0 – 39 | Foundation / Not Ready |
| DR2 | 40 – 54 | Early Readiness |
| DR3 | 55 – 69 | Developing |
| DR4 | 70 – 79 | Transaction-Ready |
| DR5 | 80 – 89 | Investor-Ready |
| DR6 | 90 – 100 | Institutional-Grade Readiness |
The final level is never the mere translation of the overall score. The Rule of Minimum Readiness™ requires, for the higher levels, thresholds per pillar, a minimum Evidence Confidence Index, analyst review coverage and no red gate. Level DR5, for example, requires at least 65% in each pillar, 70% in Financial and Transaction, an Evidence Confidence Index of at least 70% and no red Critical Gate.
Sector Overlays, Capital Fit™ and DealReady Gap™
The core score remains comparable across sectors. Sector specifics — licences and product registrations in healthcare, concessions and offtake in energy, land and seasonality in agribusiness, regulatory capital and AML in financial services, intellectual property and churn in technology — are handled in a separate overlay that does not distort the core.
Capital Fit™ measures how well readiness matches a form of capital: bank debt, private credit, private equity, strategic investor, impact / DFI, capital markets. It is not a probability of funding.
The DealReady Gap™ compares the current score with the target profile (Emerging, Growth or Institutional) and produces, criterion by criterion, the gap in points, the priority (Critical, High, Medium, Low) and the corrective action. It naturally becomes the roadmap of the Capital Readiness Sprint™.
The QuickScore™ in fifteen questions
The QuickScore is the free, self-declared version of the method: fifteen weighted questions out of 100, covering the six pillars, with four Critical Gates (financial information, ownership and governance, use of proceeds, shareholder alignment). It produces a score, six pillar scores, three strengths, three blockers ranked by impact and a recommendation. Higher levels carry the word “potential”: a QuickScore remains a self-assessment until tested against documents.
Governance and calibration
The DRS-2.0 methodology is versioned. Every report states its version and assessment date. Analysts justify every 0, 1 or 4 rating and every override; borderline files receive a double review; a methodology committee approves every change. The validation plan provides for double scoring of pilot files, structured collection of process outcomes (entry into due diligence, term sheet, closing, blockers discovered) and statistical calibration before any benchmark is published.
DRS-2.0 is a testable production methodology; it claims no statistical validation as a market standard until the sample allows it. DealReady publishes no probability of funding.
Reference frameworks
The method draws on recognised public frameworks: the IFC corporate governance methodology and Corporate Governance Development Framework, the IFC Performance Standards for environmental and social matters, the FATF recommendations on beneficial ownership, the IPEV Valuation Guidelines for private-capital valuation, and the regulatory definitions of credit ratings (ESMA, AMF-UMOA) in order to remain distinct from them. Use of these references implies no endorsement of DealReady by these institutions.