Version 1.0 — March 2026
Purpose
This document describes the structured audit Vilna Gaon SRL conducts on any consumer brand seeking investment. The audit determines whether the brand fits our investment thesis, quantifies intrinsic value, identifies operational levers for value creation, and surfaces deal-breakers before capital is deployed.
Our philosophy: we don’t invest in ideas — we invest in brands that already sell, already renew, and are one operator away from scaling.
Audit Structure
The audit is organized in 6 phases, each led by a designated specialist agent under the Managing Director’s orchestration. All phases run in parallel. Total audit duration: 10 to 15 business days.
| Phase | Focus | Lead Agent |
|---|---|---|
| 1 | Financial Health & Valuation | Warren |
| 2 | Brand & Consumer Analysis | Celine |
| 3 | Supply Chain & Operations | Nick |
| 4 | Sales & Distribution | Zig |
| 5 | Digital & E-Commerce | Dree |
| 6 | Legal & Deal Structure | Edouard / Codie |
Phase 1 — Financial Health & Valuation
Lead: Warren | Margin of safety above all.
1.1 Financial Statement Analysis (3 years minimum)
- Income statement: revenue trend, gross margin, EBITDA margin, SG&A as % of revenue
- Balance sheet: working capital, debt-to-equity, asset quality
- Cash flow statement: operating cash flow vs. net income, capex intensity, free cash flow
1.2 Cash Conversion Cycle (CCC)
- Days Sales Outstanding (DSO)
- Days Inventory Outstanding (DIO)
- Days Payable Outstanding (DPO)
- CCC = DSO + DIO – DPO
- Benchmark against industry and Vilna Gaon portfolio averages
1.3 Unit Economics
- Customer Acquisition Cost (CAC)
- Lifetime Value (LTV) and LTV:CAC ratio (target: >3x)
- Gross margin per SKU / per channel
- Contribution margin by product line
1.4 Valuation
- SDE multiple (for SMBs under 2M EUR EBITDA)
- DCF model with 3 scenarios: base, downside, upside
- Comparable transactions in consumer/FMCG
- Maximum purchase price = intrinsic value minus 30% margin of safety
1.5 Red Flags
- Declining revenue with no clear cause
- Negative or deteriorating free cash flow
- Customer concentration >30% in single account
- Owner-dependent revenue (key-man risk)
- Off-balance-sheet liabilities or contingent claims
Deliverable: Financial Memo with valuation range, CCC analysis, and go/no-go recommendation.
Phase 2 — Brand & Consumer Analysis
Lead: Celine | Every purchasing decision is emotional first, rational second.
2.1 Brand Positioning Audit
- Current positioning: what does the brand promise, to whom?
- Competitive landscape: who occupies adjacent positions?
- Brand distinctiveness: is the brand recognizable without the logo? (Distinctive Brand Assets audit)
- Price positioning vs. perceived value (anchoring analysis)
2.2 Consumer & Buyer Persona
- Who buys today? Demographics, psychographics, purchase triggers
- Who should buy tomorrow? Addressable market gap
- Purchase frequency and repurchase rate
- Net Promoter Score or equivalent loyalty metric
2.3 Marketing Channel Audit
- Channel mix: what % of revenue is driven by each channel?
- Cost per acquisition by channel
- Organic vs. paid split
- Content quality and brand consistency across touchpoints
2.4 Packaging & Sensory Audit
- Shelf presence: does it stand out in the category? (5-second test)
- Packaging hierarchy: is the value proposition readable at arm’s length?
- Sensory cues: texture, unboxing experience, scent (where applicable)
- Cialdini compliance: does the packaging trigger social proof, scarcity, authority?
2.5 Household Penetration Potential
- Current penetration rate in target market
- Distribution-weighted penetration vs. actual penetration
- Trial barriers and switching costs
Deliverable: Brand Audit Report with positioning map, persona profiles, and marketing ROI assessment.
Phase 3 — Supply Chain & Operations
Lead: Nick | Cash is trapped in inventory. Free it.
3.1 Inventory Analysis
- ABC/XYZ classification of full SKU portfolio
- Inventory turnover ratio and days of stock
- Dead stock and slow-mover identification (>90 days)
- SKU rationalization opportunity: what % of SKUs drive 80% of revenue?
3.2 Supplier & Sourcing
- Supplier concentration risk (single-source dependencies)
- Lead times and reliability (OTIF — On Time In Full)
- Raw material cost trends and hedging strategy
- MOQ constraints and their impact on cash
3.3 Production & Fulfillment
- Production capacity and utilization rate
- Make vs. buy analysis
- Order-to-delivery cycle time
- Fulfillment cost per order by channel (retail vs. DTC vs. marketplace)
3.4 S&OP Maturity
- Does a formal Sales & Operations Planning process exist?
- Demand forecasting accuracy (bias and error metrics)
- How are stock-outs and overstock situations handled?
3.5 Operational Scalability
- Can current operations handle 2x volume without proportional cost increase?
- Warehouse capacity and logistics partnerships
- Technology stack: ERP, WMS, OMS — what exists, what’s missing?
Deliverable: Supply Chain Diagnostic with inventory optimization roadmap and cost-saving opportunities.
Phase 4 — Sales & Distribution
Lead: Zig | You can have everything you want if you help enough people get what they want.
4.1 Revenue Structure
- Revenue by channel: retail, wholesale, DTC, marketplace, export
- Revenue concentration: top 5 accounts as % of total revenue
- Revenue trend by channel (growing, stable, declining)
- Seasonality pattern and promotional dependency
4.2 Customer & Account Analysis
- Active customer count and trend
- Customer acquisition rate vs. churn rate
- Average order value and order frequency
- Contract vs. spot business ratio
4.3 Sales Process Maturity
- Is there a defined sales process? (prospecting, qualification, proposal, close)
- CRM usage and pipeline visibility
- Sales cycle length by customer segment
- Win rate and objection patterns
4.4 Retail & Distribution Footprint
- Number of points of sale (POS)
- Weighted distribution: which retailers, which regions?
- Shelf position and share of shelf vs. competitors
- Listing fees, promotional contributions, and retailer margin structure
4.5 Pricing Strategy
- Pricing architecture: good/better/best tiering?
- Price elasticity awareness: has the brand tested price changes?
- Trade margin structure: brand margin vs. retailer margin vs. distributor margin
- Promotional frequency and depth (are promotions eroding brand equity?)
Deliverable: Sales Diagnostic with channel strategy recommendations and pipeline health assessment.
Phase 5 — Digital & E-Commerce
Lead: Dree | Your website is your hardest-working salesperson — or your worst.
5.1 Website & Technical Audit
- Site speed: Core Web Vitals (LCP, FID, CLS)
- Mobile responsiveness and UX flow
- SEO health: indexation, meta structure, broken links, sitemap
- SSL, security headers, and plugin hygiene
5.2 E-Commerce Performance (if applicable)
- Conversion rate by traffic source
- Cart abandonment rate and checkout friction
- Average order value online vs. offline
- Return rate and reasons
5.3 Digital Presence
- Domain authority and backlink profile
- Social media presence: platforms, followers, engagement rate
- Content velocity: how often is new content published?
- Email list size, open rate, and revenue attribution
5.4 Marketplace Performance (if applicable)
- Sales on Amazon, Bol, Newpharma, Kazidomi, etc.
- Marketplace fees vs. margin
- Review score and review volume
- Buy Box ownership and listing quality
5.5 Data & Analytics Maturity
- Is Google Analytics / tracking properly configured?
- Is there a customer data platform or unified view?
- What data does the brand own vs. what sits with retailers/marketplaces?
Deliverable: Digital Audit Report with technical fixes, SEO roadmap, and e-commerce growth plan.
Phase 6 — Legal & Deal Structure
Lead: Edouard (legal) + Codie (deal structure) | Protect the downside. The upside takes care of itself.
6.1 Legal Due Diligence
- Corporate structure: entity type, shareholders, beneficial owners
- Intellectual property: trademarks, patents, trade secrets — registered and protected?
- Contracts review: key customer contracts, supplier agreements, lease obligations
- Regulatory compliance: product certifications, labeling, industry-specific regulations
- Litigation: pending or threatened claims
- Employment: key employee contracts, non-competes, social obligations
6.2 Deal Structuring
- Seller motivation analysis: why are they selling? What do they really want?
- Valuation gap strategy: how to bridge buyer/seller price expectations
- Structure options:
- Full acquisition vs. majority stake vs. minority with path to control
- Seller financing component (earn-out, seller note, deferred payments)
- Management retention and transition plan
- Key terms: representations & warranties, non-compete, escrow, MAC clause
- Post-closing integration plan and 100-day roadmap
6.3 Risk Matrix
- Probability/impact scoring of all identified risks
- Deal-breakers vs. mitigable risks vs. acceptable risks
- Required conditions precedent before closing
Deliverable: Legal Memo + Term Sheet Draft with risk matrix and recommended deal structure.
Audit Synthesis — The Investment Committee Memo
All six phase reports feed into a single Investment Committee Memo:
1. Executive Summary
One page. The business in plain language. Why we’re interested. What we’d pay. What we’d change.
2. Investment Thesis
- Why this brand, why now, why us?
- What is the durable competitive moat (or the moat we can build)?
- What operational levers will Vilna Gaon activate post-acquisition?
3. OGSM Value Creation Plan
| Element | Description |
|---|---|
| Objective | What the brand becomes in 3-5 years under Vilna Gaon |
| Goals | Quantified targets (revenue, margin, distribution, penetration) |
| Strategies | The 3-5 strategic moves that get us there |
| Measures | KPIs tracked monthly against plan |
4. The Magic Soup — Operational Playbook
How we deploy OGSM + Supply Chain + CRM + Scaling Up on this specific brand:
- OGSM alignment with Vilna Gaon portfolio strategy
- Supply chain quick wins (CCC improvement, SKU rationalization, supplier renegotiation)
- CRM implementation or optimization (pipeline, retention, upsell)
- Scaling Up habits: daily huddles, quarterly priorities, one-page strategic plan
5. Financial Model
- Base case P&L projection (3-5 years)
- Cash flow model with CCC improvement trajectory
- IRR and MOIC under base, downside, and upside scenarios
- Breakeven timeline for investment recovery
6. Risk Register
- Top 10 risks with mitigation strategies
- Kill criteria: under what conditions do we walk away?
7. Recommendation
Go / No-Go / Conditional Go — with clear conditions.
Scoring Framework
Each phase produces a score from 1 to 5:
| Score | Meaning |
|---|---|
| 5 | Exceptional — ready to scale with minimal intervention |
| 4 | Strong — solid fundamentals, clear improvement path |
| 3 | Adequate — investable with significant operational work |
| 2 | Weak — major issues that may or may not be fixable |
| 1 | Critical — deal-breaker unless resolved pre-close |
Minimum threshold for investment: no phase below 2, weighted average above 3.0.
Weighting:
- Financial Health: 25%
- Brand & Consumer: 20%
- Supply Chain: 20%
- Sales & Distribution: 20%
- Digital: 10%
- Legal: 5% (binary — either clean or deal-breaker)
Principles Governing the Audit
- We audit to learn, not to confirm. Confirmation bias kills deals. We look for reasons NOT to invest.
- Speed without shortcuts. 10-15 days is fast. Skipping a phase is reckless. Parallel execution is the answer.
- Plain language. If the Investment Memo can’t be understood by a smart non-specialist, it’s not done.
- Seller respect. The audit process is also a relationship. How we conduct diligence signals what kind of partner we’ll be.
- Invert, always invert. For every thesis, ask: “What would have to be true for this investment to fail?”
Vilna Gaon SRL — Rue Chapelle-des-Clercs, 3 — 4000 Liege, Belgium
Private Equity | Brand Operations | Agentic AI