How to Write a Compelling Executive Summary

From the very beginning, seize the opportunity!

A first impression is a powerful one and it’s imperative to give a condensed, dynamic summary of your company in the first paragraph. Poorly written or unclear executive summaries are usually discarded quickly. This section will advise entrepreneurs on how to avoid common pitfalls and put their best foot forward.

The introductory section of a compelling executive summary is a very brief overview. A good executive summary circles back to this overview several times and gradually provides deeper levels of detail. The introduction should offer little more than a one-sentence problem statement (the hole that your idea will fill) and a one-sentence solution (a high-level description of how your idea will solve the problem). The opening section isn’t for telling VCs everything about your company. It’s designed to grab their attention with a problem statement and a solution that will subsequently be explored in much more detail.

The writing style should be passionate -- this is, after all, your professional baby -- but don’t hit VCs over the head with exclamation points and capital letters. This is a business pitch, not an infomercial. A clear, concise, controlled introduction is far better than a rambling data dump, even if it’s a passionate one.

The bulk of the executive summary should be comprised of two-to-four trips through the problem and solution, each with an increasing level of detail. Envision an airplane that is about to land: the pilot doesn’t follow a straight line from 30,000 feet straight down to the runway. Instead, he or she gradually circles the airport while carefully decreasing altitude. A good executive summary does the exact same thing.

It should start at 30,000 feet with a succinct, high-level description of the problem and the solution. Then, the entrepreneur should layer in additional details such as competitive advantages, a proposed revenue chart for at least the next five years, an assessment of market opportunities, related experience, management team bios and projected expenses. It doesn’t matter if the business plan is to be a big fish in a small pond or if the plan is to be a small fish in a big pond. It is important to include a realistic analysis of how the entrepreneur perceives the market and how he or she plans to execute the vision that is outlined in the executive summary. That will provide prospective investors with a logical foundation for understanding the company and its potential ROI.

Entrepreneurs must refrain from clichés and hubris like, “We’re the next Google” and “We don’t have any competitors.” Instead, entrepreneurs should give an honest assessment of how their business plan will capitalize on a current market trend and how it will fit into the existing competitive landscape. An objective assessment of the industry and a business plan’s strengths and weaknesses is far more valuable than exaggerated claims.

Another pet peeve of many VCs is when entrepreneurs don’t understand a few basics. For instance, VCs like to invest in companies close to home (80% of venture funding occurs within a 100-mile radius) and they like to build a portfolio of similar (but not competitive) companies. VCs have determined which markets they focus on and how much money they are willing to invest. Entrepreneurs must be aware of these basics before pitching a VC firm; off-topic pitches are far too common and they waste everyone’s time.

After navigating this far, there is one important obstacle that remains. A compelling executive summary concludes with an outline of how much money the entrepreneur is requesting. This can be a sensitive topic, similar to a salary discussion during a job interview. Entrepreneurs should use the following questions as a guide:

• Is the amount that I am listing in line with typical investments
  for this VC firm?
• Would this amount be enough to realistically start my company?
• Could I start my company with a smaller amount of money?
• What is this VC firm’s strategy regarding follow-on investments?

 

The entire executive summary should be five pages or less. It should be neatly formatted with graphics where appropriate and it should be segmented into digestible sections.