At this stage, you have probably read a number of articles, blogs, perhaps even books about the best ways to write an executive summary. Most of them have a vast number of well intended recommendations about all the elements needed in an executive summary. Ironically, while they give you a convenient list of forty-two critical items you should include, they also tell you to keep it brief. A majority of the guides about executive summary writing thus miss the crux: the role of the executive summary is not to describe, but to sell.
The executive summary is what a potential investor will come across first, so it is imperative that you give the correct first impression. In contrast to the advice in publications on this subject, you do not need to summarise the whole business plan in 250 words. What needs to be conveyed in an executive summary is its essence and energy. 30 seconds is all you have to arouse the curiosity of the investor. The objective is to be both clear and compelling to win a maximum of points early on.
Let all other suggestions you may have received slip from memory. Here are all the essential components that should be included in your executive summary. You will also find some general points to consider, so that you can avoid quite a number of classical pitfalls.
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Step n°1 |
You should lead with the most compelling statement of why you have a really big idea. You need to get your reader to think, “Wow!” This sentence (or two) sets the tone for the rest of the executive summary.
Usually, this is a concise statement of the unique solution you have developed to a big problem. It should be direct and specific, not abstract and conceptual.
If you can drop some impressive names in the first paragraphyou should—world-class advisors, companies you are already working with, a brand name founding investor.
Don’t expect an investor to discover that you have two Nobel laureates on your advisory board six paragraphs later. He or she may never get that far.
Step n°2 |
You need to make it clear that there is a big, important problem (current or emerging) that you are going to solve, or opportunity you are going to exploit.
In this context you are establishing your Value Proposition—there is enormous pain and opportunity out there, and you are going to increase revenues, reduce costs, increase speed, expand reach, eliminate inefficiency, increase effectiveness, whatever.
Don’t confuse your statement of the problem with the size of the opportunity (see below).
Step n°3 |
What specifically are you offering to whom? Software, hardware, service, combination? Use commonly used terms to state concretely what you have, or what you do, that solves the problem you’ve identified.
thumb_upAvoid acronyms and don’t try to use these precious few words to create and trademark a bunch of terms that won’t mean anything
to most people.
You might need to clarify where you fit in the value chain or distribution channels—who do you work with in the ecosystem of your sector, and why will they be eager to work with you. If you have customers and revenues, make it clear. If not, tell the investor when you will.
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