Read This to Make Sure You Make the Most of Your Opportunity
Written by Jeremy Glaser
You have raised your friends and family/angel round, built out the beta of your product and have a few early paying customers. Now it is time to raise the money you need to grow from institutional investors. How do you get their attention when so many companies are in the same boat as you? Your executive summary – a one to two page teaser – is the crucial document you need to stand out among the noise and get noticed.
I have helped hundreds of companies draft their executive summaries with the goal of getting in front of the right potential investors. In that process, I have seen a consistent mistake that many companies make that hurts their ability to attract investors. The most common mistake made by technology-focused companies, whether in software, biotech, mobile apps or other technology fields, in preparing their executive summary is that they do not ask themselves, “What is the investor’s goals and needs in making this investment”. Instead they focus their executive summary too much on how cool and innovative their company’s technology is without translating that into how will the investors make money. Remember, investors are busy and are inundated with hundreds of business plans. You need to make it easy for them to understand what you are doing and how they can make money off of it quickly; otherwise your executive summary will end up in the “no” pile and it will be almost impossible to resurrect it.
To avoid this mistake, make sure that the first paragraph of your executive summary answers each of the following questions, preferably in order:
- What does your product do?
- What is that problem your product is solving?
- How big is the market for your product?
- How will you make money? (i.e., What is your revenue model?)
- Why is this management team the best people to pull this off?
Once you have that first paragraph written, the rest of your executive summary flows easily with each subsequent paragraph answering each of the five questions above in greater detail.
My over 30 years’ experience in applying this model has shown that if you answer each of these questions right off the bat in your introductory paragraph, you will increase your chances of attractingan investor’s attention.
Remember, while your technology is important and you will ultimately need to be able to explain what it is in great detail, the purpose of your executive summary is to pique the interest of the investor enough that they will want to learn more and contact you to set up a meeting. If you answer each of the questions above, you will have given them enough information for them to want to reach out to you and you will be well on your way to closing your next round of financing!