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What is an executive summary? Your executive summary is essentially the cover letter to your business plan. It works to get the reader to check out your business plan and, hopefully, to set up a meeting. Think of your executive summary as the halfway point between your elevator pitch and your business plan—you have about 2 pages (give or take) to communicate your value proposition and get you to the next stop on your startup journey.
Read on for how to write an executive summary with impact:
1. Do it yourself. Sure you can get help, but the exercise of creating your executive summary is an important one. The act of distilling your organization down to its core will not only result in a compelling story, but it will help you to identify your major strengths and focus your company. Just as I don’t recommend you outsourcing the writing of your business plan (see my previous article on this topic:: Should You Outsource Your Startup Business Plan?), I wouldn’t pass on this task.
2. Keep it short and simple. The executive summary isn’t called a “summary” for nothing! Your readers are not looking for an in-depth analysis. If you can’t summarize what your company does in just a few pages, there’s a problem. Don’t worry about following a specific executive summary outline(e.g., it doesn’t have to be exactly 2 pages), but do think about how you can strip away extraneous content to bring attention to the main message, and save readers time. Any layperson who reads your executive summary should clearly understand what your company does. A good check is to have someone from outside your circle read your draft and reflect back to you what they got out of it. If they can’t, take a step back and try again. And remember, bulleted lists are your friend!
3. Start with a bang. What’s going to grab a potential investor and inspire them to read on? What’s the most compelling thing about your company? What are you doing that nobody else is? You want to pull in your reader from the very beginning.
4. Problem—Solution—Opportunity. These three things, presented in this order, are essential. This is the meat of your document: what problem does your company solve, how does it solve it, and what’s the real market for your solution (not a trumped up top-down projection).
5. Focus on what makes you stand out. If your startup is introducing some sort of new technology, focus on this. If your company has already shown real traction, you’re acquiring a significant customer base, or you’re earning substantial revenue, make this the focus of your executive summary. Stellar executive team – push it hard. Whatever it is that makes your company unique should be at the heart of your executive summary. This is what matters.
6. Sell don’t tell. Your executive summary doesn’t have to outline everything that’s contained in your business plan. It needs to compel the reader to check out your business plan. This isn’t a book report; it’s more of a promotional brochure.
7. Include a financial summary. Again, keep it brief, but your executive summary should include some financials, in particular, your valuation, history of revenue, cash, expenses (including headcount), losses/profits, and some key drivers. At this point, potential investors just want to get an idea of what returns they can expect. It’s your job to show that your investor will win on this investment.
Need help with your valuation? Contact Early Growth Financial Services.
8. Speak in your own voice. This is an underrated resource. There’s no one right style or tone for an executive summary. Just try to make your executive summary be a true reflection of you and your company. Speak in the first person or first-person plural (“I” and “we”) and let your personality come through. Authenticity is compelling.
9. Ask for what you need. You are asking for money, so be upfront about how much funding you are seeking. What amount will help you to get to your next milestone, and what is that milestone? Also, if you foresee future rounds, project out to how much you expect you will be looking for in the future. Always tie these rounds to your milestones and support your forecasts with relevant data.
10. Keep your end-goal in mind. No startup has ever received a check as a result of a fantastic executive summary. It’s not going to happen. An executive summary is just a tool. Remember that its goal is to get potential investors to want to know more. This is a great guiding principle. With every sentence that you write, give it the test: Will this make a VC want to know more? If not, delete and try again.
Now that you know what to include in an executive summary, do you think you have an effective one?? What makes it so? Join the conversation here.
David Ehrenberg is the founder and CEO of Early Growth Financial Services, an outsourced financial services firm that provides early-stage companies with accounting, finance, tax, valuation, and corporate governance services and support. He’s a financial expert and startup mentor, whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.