5 Hot Tips for an Executive Summary
The first step to fundraising is crafting a killer executive summary that opens the doors for in-person meetings. Think of it as your business card - compact, professional yet memorable. I spoke with several investors and distilled their input into the following 5 tips.
Tip #1: It’s a sales pitch, treat it like one.
This is the toughest sale you’ll make to the most cynical, intellectually endowed audience. So put your sales hat on, not your engineering, product, or even marketing hat. Some cool new tricks include creating an automated demo of the service and putting the link in the product section in the summary. Another one is getting videos of pilot or potential customers and incorporating those links or videos into the online summary. So, don’t be shy to sell your story in the best possible way.
Tip #2: What are the numbers?
Nothing sells like numbers for investors, in fact most of them have deeply analytical backgrounds. So, read your summary and try to quantify the adjectives for all sections. “We have a huge growing market” = “We have a $1billion addressable market growing at the rate of 18% annually.” “Our customers have both an ability and the authority to pay” = “customers currently have an annual budget of $1million of which $250k is spent on addressing the pain we solve.” You get the point… but the most important number of all is the total returns number. How will an investor see their money grow by investing in you. Show them the money! Then wait for the phone to ring.
Tip #3: Make sure your business is crystal clear and articulated simply.
“I can’t tell you how many times the executive summary reads like a product brochure,” or “If I don’t understand the basics of the business within the first few paragraphs I don’t bother reading on” are some of the opinions of investors. So, make sure you write less about the product and more about the business (you know, like what’s the market need, where’s the money and how big can you be.) Use short powerful sentences rather than hype or jargon to convince the investor that they need to get a meeting with you right away.
Tip #4: Your unfair advantage - in bold and underlined.
Did I mention investors are a cynical bunch? They’ve heard every dream and promise, and have lost on more than 50% of those promised dreams. So what they look for is the unfair advantage. What secret tool do you have or what knowledge will translate into a higher probability of success. If you don’t have an unfair advantage, then its time to find one! Some examples can be a seasoned team with relevant experience, an algorithm you wrote that is patentable and critical for success, or prior customers who will give you a break because of your relationship with them.
Tip #5: Answer all the key questions
Like on an exam, you can’t get a perfect score without answering all the questions. No extra credit for nailing half the questions! Meaning, answer the basic questions every executive summary must answer and in equal proportion. In case you are wondering about the questions, here they are (not in any recommended order):
a. Customer pain, market size, competition
b. Your solution and unfair advantage
c. Business model and projections
d. Customer acquisition strategy
e. Team, stage of business, funding needed
So there you have it - wishing your killer idea great success!
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