Great Executive Summaries

Great Executive Summaries Andrew Forbes

Why create an executive summary?
Executive summaries
put lipstick on the pig
are the camel’s nose under the tent wall
Get your foot in the door with investors, who
are only interested in a huge payoff from a “sure thing”
follow investment trends
use your executive summary to make a decision about agreeing to a face to face meeting with you

What investors know
Taking a company from startup to liquidity event and standing where lighting is going to strike have a lot in common – Andrew Nash
The Chinese use two brush strokes to write the word 'crisis.' One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger - but recognize the opportunity – Richard M. Nixon
Genius is 1% inspiration and 99% perspiration – Thomas Edison

What investors want
One big risk – can you profitably sell your product / service?
All minor risks mitigated
All the dots connected
No learning on their nickel
To know that you know the rules of the game
To not wake up at night wondering what possessed them to put money into your venture

Put on a happy face
The one page executive summary opens the door
Tells the investor how you plan to make money
Shows that you:
have connected all of the dots
have minimized the risk on everything but selling your product
are ready for money
know how the game is played
won’t wake the investor up in the middle of the night

Header
Who are you
Where are you
What is your contact info
That you have a working domain name
That you have a web site
That you have a logo
That at 30,000 feet you are a real company

Left Column
Management
Lawyer(s)
Accountant
Bank
Amount sought
Previous investors
Use of funds – this is how you’re going to use the money you raise to resolve your one big risk
That at 10,000 feet you still look like a real company

Business Description
A paragraph that describes your business
Should track with the first couple of sentences of your elevator pitch
Clear, concise, and non-technical description

Business Strategy
A paragraph that describes how your business is going to work
Should track with your elevator pitch
Clear, concise, and non-technical

Product / Service
A paragraph that describes your product and / or service
Clear, concise, and non-technical

Unfair Advantage
A paragraph about what makes you special
Are there barriers to entry? What are they?
What makes you better, faster, stronger?
If you have IP, how are you protecting it?

Target Market
A paragraph about your customers
Who are they
Why will they buy from you
What about them will cause them to view your product / service as unique / special

Sales Channels
A paragraph about your sales channels
How are you going to sell your product / service
A couple of hints
Do not mention channel partners unless the deal is already in place and generating revenue
If you can’t sell your product yourself, it is very unlikely that other people will sell it for you

Competition
Brief paragraph acknowledging your competition
Do not dwell on this topic
Hints
Do not say you have no competition
There are always other companies competing with you for your customer’s money

Outlook
A paragraph about where you’ll be in five years
Employ every last bit of your Hemingway-eske abilities
Don’t hold back

Financial Projections
Three lines
Year (one through five)
Revenue (in thousands)
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
Revenue should be at least $100 Million in year five
EBITDA should be between 30% and 60% of revenue

Footer
If your complete address is not in the header, put it in the footer

Summary
Your executive summary should
Be one page
Make it clear you’ve connected all of the dots
Identify your one big risk
Make it clear how your plans and the investor’s money will resolve the one big risk
Make you look like a real company from 1000 feet
And most importantly, cause the investor to take your call when you contact them to set up a face to face meeting!

Contact Information
Andrew Forbes
[email_address]

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Great Executive Summaries

by Andy Forbes on Jan 27, 2007

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