As an angel investor and leader of an angel group, I receive funding inquiries every day. Most come in the form of an executive summary, which typically provides one of the initial interactions an entrepreneur will have with an investor.
There have been numerous articles and blogs written on the executive summary. However, in my opinion, the best of the bunch comes from Guy Kawasaki and Bill Reichert of Garage Technology Ventures. According to “Garage” it’s not about providing a business plan in 250 words or less, it’s about the “need to convey its essence, and its energy”. I could not agree more!
There is also much debate about which is more important, the team or the idea. That’s a debate to be addressed in another article, so let’s put it aside for now. However, let’s stipulate that both are critical for the investor as are the problem, or the “pain” which served to stimulate the idea, and the potential opportunity the solution may provide for the entrepreneur and investors. In the end, it’s this opportunity that enables you to promise as an entrepreneur to investors.
How do you convey that to an investor through your executive summary?
To answer this question, I must begin with a confession; I have the attention span of a gnat. Unfortunately, this is an affliction shared by many other investors as well. In a world packed with activity and distractions, one in which an angel investor reviews several hundred executive summaries a year, there is a tendency for them to begin to blur.
We are all familiar with the old worn out saying, “the three most important words in real estate are location, location, location.” For the startup entrepreneur, the four most important words in their toolkit are:
- the “hook”
- the “nab”
- the “snag” and
- the “grab”.
Simply put, your executive summary must lead with the most compelling statement you can convey about your idea.
It should be a statement that sets the tone by “Wowing” the investor such that it will hook, nab, snag or grab their attention to read further. Ultimately you have less than 30 seconds to get this investor’s interest. Be clear, concise and compelling. Make the investor want to read on!