June 26, 2019 – Wikipedia defines an ‘Executive Summary’ as a short document or section of a document, produced for business purposes, that summarizes a longer report or proposal or a group of related reports in such a way that readers can rapidly become acquainted with a large body of material without having to read it all.
Historically, an executive summary was just that—a summary of your business plan which was generally 50 pages or more. Today’s entrepreneurs know that when you are launching and growing your start-up that executive summaries are more than a short summary document. They are your startup’s resume. And like with a resume most people struggle to create strong executive summaries, and a weak one can cost you important opportunities.
As you create your executive summary you need to keep three things in mind:
- They are an essential marketing material that can serve multiple purposes– i.e. they can introduce your product/service to potential customers or introduce your business/investment opportunity to prospective investors. As an essential document, entrepreneurs need to dedicate time to developing strong executive summaries. If you were searching for a job, you would certainly dedicate time to making sure your resume was strong and highlighted the best aspects of you as a candidate.
- They are a teaser. Subsequently, they should be succinct and concise and by design don’t need to include all of the details of your product/service or business/investment opportunity. Your executive summary is not going to convince an investor to write you a check or a customer to buy your product, but it may convince them to stay engaged with you.
- Unfortunately, like your resume, most people will only briefly scan the document and make a decision about whether or not to engage your company. Thus, you should avoid large blocks of solid text and look to leverage different formatting options to highlight the unique and compelling aspects you want the readers to review.
A good executive summary is built on a strong narrative that incorporates all aspects of the product/solution and business. If you have a well-developed pitch deck then creating your executive summary should not be an issue since you can create a paragraph for each slide in your pitch deck. If you don’t have a pitch deck, I would suggest creating one before working on your executive summary since it’s easier to condense a pitch deck into an executive summary format than to create an executive summary from scratch due to the text limit restrictions- generally one or two pages.
In a previous blog post for ITEN, I discussed creating an investor pitch deck and provided an outline. I would highly suggest that entrepreneurs read that blog post as well as the resources, blogs and articles included.
Keep in mind that you can reorder the sections to fit the strongest narrative or add additional sections that may be specific to your product or market (such as regulatory and reimbursement for medical device or healthcare technology companies), but here are the main areas that should be included:
- Attention Grabber– a short description of the product/service or business/investment opportunity, could be in the form of the vision or mission statement of the company
- Identification of Problem– introduce the “Pain Point” that you are alleviating with your product or service and identify your customer base
- Solution/Technology– explain your solution to the problem and identify how your solution solves the problem in a unique and compelling manner, and include any proprietary approaches (IP)
- Competition– briefly highlight the competitive landscape but be sure to identify your competitive differentiator and the barriers to entry for new entrants to the market- i.e. why will you gain a larger market share than everyone else
- Market Opportunity– what is the size of the opportunity in the market for your product or service (TAM/SAM/SOM) and what are the characteristics of your early adopters or ideal customers
- Go-to-Market Strategy– how are you going to identify your early customers, how do you plan to scale the business, what are your early Sales & Marketing metrics (CAC, LTV, etc.)
- Business Model & Current Traction– briefly describe how you plan to monetize your product/solution and discuss relevant traction KPIs (total users/units sold, month over month growth, engagement metrics- i.e. daily active users, revenue, etc.)
- Management Team– provide an overview of all key members of the Management and Advisory team, focusing on previous experiences relevant to the business opportunity
- Proposed Deal Terms, Use of Funds, & Future Capital Needs
As you are creating your executive summary, keep in mind that this document is a teaser for your audience and the goal is to engage your audience into either inviting you to pitch your business opportunity or to offer you the opportunity for you to sell them your product/service.
Therefore, the document should briefly describe the key aspects of the product/service or business/investment opportunity, as well as highlight what is unique and compelling compared to not only your competitors, but the other entrepreneurs competing for the reader’s investment.
Similar to pitch decks, a quick Google search will return an almost endless list of articles and blog posts written by serial entrepreneurs, successful investors, and business guru’s discussing their insights related to how to write the best executive summary. Some additional resources include:
- How to Write an Executive Summary from Inc.
- Writing a Compelling Executive Summary How to wow investors from the get-go
- How to Write an Executive Summary
- Share your executive summary with people not associated with your company. Ask them to read it and then ask them if they understand the concepts you are trying to convey in each section. Many entrepreneurs when writing about their companies tend to commit a few common errors- they assume their audience knows more about the problem they are solving than they actually do, or they use too much technical jargon in their descriptions. Your executive summary should be written so that anyone can understand the problem you are addressing and what makes your product/solution unique and compelling. If it helps, pretend your grandparents will be reading your executive summary.
- Be sure to have someone review your executive summaries to identify and correct grammatical errors.
- Try to limit your executive summary to one or two pages. I prefer two pages since you can print it on a single sheet (double-sided printing) which can be a solid investor or sales & marketing hand out.
- Similar to resumes, there are multiple formats that you can use. I would suggest looking at as many formats as possible and identify one that will allow you to highlight the most compelling aspects of your product/service or business while avoiding large blocks of text.
- Think about how often you update your resume, or how many different versions of your resume you have that highlight different aspects of your experience. You should be updating your executive summary as often and should feel comfortable crafting multiple versions that highlight different aspects of your company or product/solution. I would suggest starting with a more generic version that can be used in multiple situations including being posted on your website or shared with media prior to an interview request. Then develop a customer-centric version, and an investor specific version that includes revenue projections and details about the current fundraising effort, as you receive requests for these versions.
- Always send files to prospective investors or customers as a PDF since they are the easiest files to open across operating systems and devices (mobile vs. tablet vs. desktop). Also, clearly label your files with the company name, type of file, and date. Remove all “internal” file name notes- version number, initials of edited it last, etc. For example, use Acme_Co_Executive_Summary_190518.pdf as opposed to Executive_Summary_v13_jcs_edit.ppt.