The Executive Summary
Every entrepreneur has heard of the executive summary. It is the device they use to “sell” their idea (and themselves) to prospective investors.
So what is an executive summary exactly? Is there some format we should follow? What information should be included? Do we hire someone to make this for us?
If you have visited enough investor websites (angels and VCs usually) you will have come across some sort of template they want you to use for an executive summary. Some have forms, some are blank word docs, most are probably just send us the attachment (keep it under X MBs). Regardless, they are all looking for some basic information about you and your company.
1. What your company does – what exactly are you looking to do with your product / service?
2. What problem does your company solve?
a. Is there a need for this good or service?
3. Market information – how much need is there? What are people currently paying for the good / service? Why is your company better / different from the rest? How big can your company become?
4. How are you going to make money?
5. Why are you the best person to make this company work?
6. How much money are you looking for? Why do you need that amount? How much is your company worth right now?
a. These are the questions that you will need to be most clear about prepared for.
7. How are you planning on using the funding?
8. How are we, the investors, going to make a return on our investment? And when?
a. IPO, M&A, etc.
Depending on your company and the investors you may need technical information about your products / services or other information in general.
You have about 3 minutes and 2-3 slides (PPT) to capture the reader into continuing.
A lot of entrepreneurs “spray and pray” sending mass emails out to every VC under the sun. I would advise against this technique.
Just like any job application or college application the reader wants to see that you know what they do and their interests. If you’re sending your ES to a VC look at their portfolio. DO they have companies like yours? If not, are they at least in the similar space as your company (are you an internet startup applying to a Biotech VC…. You’d be surprised how often this happens)?
Also make sure you have an idea about your competition, I’m sure I’ve said this in another post, if you can’t find a comparable company you’re not looking hard enough. The more you know about your competition implies that you know a decent amount about the market you’re in and therefore are probably a competent CEO.
I’ve seen a lot of executive summaries and the ones that stick out most are clean and concise. Try to keep in mind your audience and how you would feel in their shoes.
That is all for today, next time we will look at how to choose your investor.