Posts Tagged proof
List What Makes This Company Unique and Special
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.
Have you ever had someone just look you straight in the eye and ask: “Enough telling me about who you are, what you are going to do, and the market size; tell me why is THIS COMPANY and project going to be successful? How am I assured that I will get my money back and more?”
In this section of the executive summary, you should list all the reasons the company will be successful and will pay back the investors. Rather than just write that, the following list of key questions can be answered, and help build a compelling story for the investors:
- What key management experience will be used for this?
- What key management decisions (i.e. focus of the company) will enable this company to be successful?
- How will the budget/cost be managed successful and affect the profitability?
- Where (channels, markets, etc) will the profits come from?
- What is the compelling need of the market? What is the PROOF of this need?
- Who are the customers? Include demographics of the largest segment. How big and what is their purchasing power?
- What makes this company and product unique or special?
- What barriers to entry exist (from outsiders and competitors)?
- Are there other reasons that this project will be successful (i.e. short ROI, short payoff of capital expenditures, key contracts)?
Notice that there are many sections of the business plan incorporated into this one section: marketing, management, sales, operations, finance. These questions pull in the key winning points from each section. When these questions are compiled into a single story, the investor will see that another company making the same or similar product/service will not be as successful. It can be simply stated as a bullet point list with the header: “How We Will Be Successful”. This section delivers the key idea that this company will be the next big winner. More importantly, it addresses how the investors will win with this company in their portfolio.
Tell the Investor Why this Management Team and this Company are the Right Stuff
Posted by Steve in Leadership, Pitch on July 2, 2009
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.
Investors invest in people. More than one company can come up with the same idea, but the difference between them is the way they execute it and handle the ups and downs along the way.
The executive summary needs to show proof that these people are the right people. I look at six key points and then come up with a concise story covering what the investors need to know:
- Which top management and key members will be integral to the company’s performance?
- What experiences or types of products have they done, that the experience will be integral to the company’s performance?
- How long has the company or team been working on this project together?
- What major accomplishments (milestones) has the company hit in achieving their goals?
- What is the current state of the product/service line?
- What validation exists that this team can sell the product/service line?
When looking at this list it starts off with the information about the company, and the accomplishments. It ends with questions about the product line and the future of the company. With this information, you build your case that this team not only has achieved success so far, but can continue to do so with the advantages they have. Item 6 also includes outside forces that further validate that this team has formed in the right place at the right time to make this successful. Items 5 and 6 can also be used later in discussing other elements (like what is the money going to used for and how will it be marketed) but the focus in this section is how this management team as opposed to another management team will take advantage of the situation.
This may be the most important section as the investor will want to keenly observe how this management operates and then determine whether or not they will be successful.
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.