The Executive Summary
When raising money, you generally need a business
plan. But, it's not a good idea to send off a complete business plan
without some introductory discussions or meetings first. In order to determine
if someone might even be interested in looking at your opportunity, you
need a summary, i.e. an "Executive Summary", of your plan which is brief,
to the point, and will hopefully evoke sufficient interest in the recipient
to warrant taking a closer look.
Think of your opening line about our company as if you were making an
"elevator pitch", i.e. picture yourself on an elevator ride with a potential
investor. You know that she's getting off on the top floor, so that only
gives you a couple of minutes to get her attention. What will you tell
her (about the business, that is)?
This summary should contain the most important points of the business
plan. It should be fairly brief, typically less than two pages. If
you want to get fancy, you could make it a 4 page presentation consisting
of an 11 X 17 sheet of paper, folded in two, and printed on both sides.
But, in any event, it is important to capture the reader's interest in
the first page.
So, What should be Included?
The following are commonly used sub-headings to cover the key points. Avoid
general motherhood statements and be sure to clearly articulate key numbers.
Regardless of how you organize your summary, be sure to answer the following
questions (note - due to the sensitive, confidential nature of what you
might say in such a a document, you might want to restrict your disclosure
in certain areas and only reveal such information to others if you are
assured of confidentiality). You should address these questions, and any
others which you consider important, under headings such as those noted
Products & Markets
Sales and Profit summary
Questions to address:
What is the full, legal name (and jurisdiction of incorporation) of the
company (if it exists) and a brief history (when incorporated, ownership
and capital structure, track record, accomplishments to date if any, etc)?
Don't forget to include a complete address and contact details (email address,
telephone numbers, etc).
What is the "Mission" of the company (i.e. what is it setting out to achieve
What is the market which the company is going after (who, where, size -in
dollars) and what is the unique (i.e. proprietary advantage in the form
of patents, trade secrets, trademarks) or new product or service which
is being offered to this market? A comment on competition is useful. Also,
identify and current and potential customers. Testimonials are helpful.
Who are the key people behind the venture (i.e. why would someone entrust
them with their money?) and what are their credentials? Include all board
members and key management people.
What does the company expect to achieve in sales and profit (before tax)
(in $) in years 1, 2, 3 and beyond?
How much capital is needed (at various stages over the first 3 years)?
And what are the uses to which these funds will be applied?
What has already been invested (# of years sweat equity, or seed investment
amounts, i.e.#shares@$xx, and by whom)?
What is being offered for the investment (e.g. equity %, board seat, etc.)
What kind of return might an investor expect? over what time frame? and
what is the "exit strategy"?
What else is important to note? (that hasn't been covered elsewhere)
Copyright 1999 Michael C. Volker
Last Update: 990513
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