Detailing Your Executive Summary for Venture Capitalists
You’ve spent days, even weeks, writing, rewriting and firming up your business plan so that it will shine in the eyes of a venture capital firm. Even though your executive summary is not the longest section of your business plan, it does warrant a great amount of your attention. Remember, it is your executive summary that will attract the attention of the reader.
The executive summary is the opening section of your business plan, providing a high level view of your business idea and strategy. It is what venture capitalists will read first. Based upon the summary, most venture capitalist firms will decide if they want to know more about a company or simply toss the plan based upon this short introduction. Subsequently, you should take special care in perfecting the details of your executive summary.
The details of your executive summary should include:
Mission Statement – Summarize this statement into one or two very clear and succinct sentences. Every word you use should be chosen carefully so that you present not only the business mission, but the emotion of succeeding in that mission.
Product or Service Overview – What is your business? Provide a brief overview of what your product or service is and why customers will want to buy it. Expand the overview to include how your product or service fills a particular niche.
Your Market – Who will buy your product or service? Let your potential venture capitalist investor know exactly what market segment will be interested in your product or service and why they will buy yours over the competition.
Achievements to Date – If your business has been operating successfully for a period of time, or if you have successfully raised other startup capital, list these achievements in the executive summary as well. A VC firm will like to know that you have taken initiative in obtaining other sources of capital and that the business has been steadily operating and growing up to this point.
The Obstacles – Every business needs to have a clear and realistic view of the obstacles it may encounter. That means listing the competition and how you plan to succeed in joining the market segment. You should also list other barriers to entering the business arena, such as technology patents or economies of scale.
Financial Summary – Briefly entice venture capitalists to read the full financial section. Chose a few key graphs or charts that show your profit and revenue growth over time.
Management Team – Also briefly introduce the top management team (including yourself) who will be growing the business and making it succeed. In a sentence or two, explain why they are the best choice to fill their position.
Your meeting with a venture capital firm depends on a clean and well written business plan. The only way to get a VC firm to read your plan is to make sure they get past the initial business summary. Spend the time to edit and re-edit your executive summary so that it is the highlight of the business plan.