Posts Tagged executive summary
Give the Investor PROOF that the Market needs your solution
In this series of installments I am discussing the executive summary and how to make it stand out. The executive summary should present the compelling reason for the investor to buy into the company.
Yesterday, I asked if after reading someone’s executive summary you ever wondered what they were doing. Today, I ask if, once you figured that out, you then asked, why? What is the compelling reason that this project is going to make money?
That is the second biggest thing that investors want to know. First, what are you doing? Second, why is that important to me? Why will that make a lot of money?
Therefore, the second part should address: What is the market proof that the company is doing the right thing? There are four points I address here:
- How big is the market?
- What does the market pay for this product/service? Will it change and why?
- Who are the biggest players in this market and how big are they?
- What indicators show the market is growing and that the company will make money?
Think about this: if it’s a small market, the market is shrinking, and there are already huge players in the market, then it may not be a good market to get into and make a home run. However, say it’s a huge market, the market is growing, and some big players are already exploring it, then its possible. Do not think that big players means you are excluded. Big players often move slowly, or have to invest in massive projects that take a lot of time to finish.
Do not waste the investors time. You just told them what you are doing, and now you are telling them why this is going to make a lot of money.
Remember, it is about the win.
Start the Executive Summary with the Goal
In the next series of installments I am discussing the executive summary and how to make it stand out. The executive summary should present the compelling reason for the investor to buy into the company.
Have you ever read someone’s executive summary, ask yourself one question: What are they trying to do? If it is not clearly stated then they missed the boat.
Clearly, they should introduce themselves and what they do; but then just right out state the goal. Three questions should be answered:
- What is the name of the company and its form?
- What is the company going to do? This could be the goal or mission.
- What will this lead to, or what else will the company do that will ultimately deliver the big payback?
Example:
ABC, Inc. will build and operate an ethanol production facility (100 Million gals/year) in Texas, primarily for the fuel additive market. Other products will include 5 million tons of grain products for livestock feed and 50 Billion cubic feet of CO2 for carbonated beverages.
All the investor has to do to know if this fits into their area of interest is to read the first two lines. Secondly, if it is in their area of interest they would probably already know that this is a very large facility and would deliver a large return if built and operated successfully. If they are not in this arena then they can quickly say, “No, “ but more importantly, direct it to someone that might say, “Yes.”
Keep it simple and to the point. That will be the common theme in every one of these discussions on the Executive summary.
Executive Summary of the Executive Summary
Posted by Steve in Miscellaneous, Pitch on June 23, 2009
Every investor wants an executive summary. It is the entire business plan in miniature form: 1 or 2 pages. Typically, it is written after the business plan but since it is either the first thing or only thing read by potential investors, it needs to be the best written.
There are different ideas on how to write an executive summary. Some say it should be the plan in miniature with the same outline. Others say it should outline the problem, background information, proposed solution, alternatives, and any conclusions. I suggest that the executive summary be a highly selective form of the business plan with sections answering the following key questions:
Bottom line, what is the goal?
What is the market proof the company should do this?
What is the management and existing company and what are the key accomplishments to date that state they should get investment? Why them?
What is the first item the company will produce with the money, and therefore, why do they need the money (how is the money going to be used)?
What are the high level elements of the marketing plan and are there any key activities happening now?
Why will this project be successful?
What is the major risk issue and how is it being addressed?
Why is the company talking to outside people and what do they want from the investor? What is their exit plan and how will they repay the investor/bank, etc?
These are the key points that the primary audience (investors, loan officers, etc) need to know if they want to read further or throw it back in the pile. This information will get the attention of the reader, and give them an incentive to read more or talk to you. More on each question later…
The Follow-Up Letter
Posted by Steve in For Job Seekers, Pitch on April 14, 2009
One of the hardest skills to find in people today is good follow-up. When you demonstrate to your future employer or funder that you have the best follow-up then you will stand out.
Whether you are seeking investment or a job, the follow up letter after you meet someone is most crucial. How do you write the best follow up letter?
Make it short.
- Express your interest in the job or getting the funding; but only if you really want it.
- If it is a job then remember your theme – reiterate the key strengths that you would bring to the job. If any revelations occurred during your discussion then repeat them here. Attach your resume.
- If it is funding, then make it shorter by attaching your executive summary. Let the executive summary stand on its own.
- Leave it with an action that you will be in touch in a week.
Send it within 24 business hours of your last discussion. Show them your good followup. However, if you do not send it in 24 hours, send it as soon as you can. Any follow up is better than today’s average: No Follow up!
As you can see, a follow-up letter works in the same way for the entrepreneur as for the job seeker. The elements are the same: reiterate the good impression, show them that you genuinely want to help them achieve success.
How can studying about investors and entrepreneurs be used?
Posted by Steve in Execution, Introduction, Pitch, Plan on April 13, 2009
Part 3 of 3.
Two weeks ago (Monday March 30, 2009), Bart Kemper asked how he could use this blog if he was not seeking investments or investors. Then and last week I pointed out:
1. I strive to provide information that in the right setting can open up more opportunities leading to more clients.
2. The information can be used to prepare the company for a merger, acquisition, sales, or other type of owner exit. All these elements make the company better and look better.
The third and final point is even simpler.
Just because you are not looking for investors does not mean you should forget about a business plan, or not have a good pitch, or not have a good strategy.
The idea is not to make the company just look better. It point is make the company actually be better, and to be able to effectively communicate that to outsiders. The 14 points are there to provide a guideline on the real qualities of a business that makes the business successful.
Each of these 14 points is not just useful for getting investors, but they are useful for growing the company. I will be writing not just about the high level stuff but also the low level details. How do you write a business plan? How do you write an executive summary? What are good interview questions?
For example, how could you use a well designed elevator pitch?
- Get investors.
- Get clients.
- Get a job.
Everyone at some point has been in a room where the audience is asked to each stand up and say something themselves. Most people are unprepared and give a rambling 20 seconds. There is nothing like standing up in this crowded environment and delivering a very clear, concise, and punchy elevator pitch. People will remember you. It will open up doors.