Startup Lesson 32: 1-Page Executive Summary

execsummAs you move through the stages of your startup, you will undoubtedly be asked to send over your 1-page executive summary.  Usually, this request is in response to your reaching out and seeking investment financing.  The executive summary is the investor’s quick filter for making a decision about whether to move your startup on up the chain towards the next meeting.  So what should your executive summary contain?  First, download a standard template here. This is the same PDF used by Venture Atlanta, MIT Group, etc. Let’s break it down section by section.

Header:

  • Company name: Put your logo on it! Give this boring doc some color. No logo yet? That’s possible, if you’re in very early stage. So put the company name.
  • Address: The address is NOT your home address. For a lot of reasons, make sure it’s not your home address. Get a PO box if you have to.
  • Your company URL, e.g., mycompany.com/net/org/co whatever, goes at the top and make sure your email address is name@mycompany.com. You can get by with GMail, but if you still have a freaking AOL address, just stop here.

The Management section:

  • Team is very important. Investors don’t like “solopreneurs”, unless you’ve had multiple exits and you know the investors and they know you and it’s inevitable you’ll be putting together an awesome team. But in that case, you’re having drinks with the investors, not emailing them an executive summary, right? So if you really don’t have a team, get some solid advisors. Team is important.
  • Industry, employee count, bank, and law firm are self explanatory.
  • If you have current investors, list them and the amounts invested.
  • The amount of financing sought and use of funds is a big deal. You must put serious analytical thought into how much money you need and exactly what you’re going to use it for. Be very specific.

Business description

  • The first field is your elevator pitch. A good measure is if you can put it in a 140 character tweet. If not, it’s too long.  If you can’t say it in 30 seconds or less and have your mom understand it, then you don’t know it yourself.
  • Company background is your story. How’d you arrive at this startup? Domain expertise? Did you find a problem in an industry in which you have lots of experience? Did you win a pitch or hackathon contest? Where’d this idea come from?
  • Problem/Solution: Investors like big, gnarly problems that are solvable with scalable technology. You must clearly explain the problem in the industry sector that you are attacking. Personalize it, so that even the least knowledgeable investor for that industry gets it quickly.
  • Product/Service: A brief explanation of what you’re building.  How are you different?
  • Technology/special know how (aka ‘secret sauce’): What do you have that nobody else has? It might be really cool tech IP, or relationships, or deep domain expertise, or your team. Whatever it is, make it shine here.

Marketing

  • Markets: investors love big huge markets. If you’re seeking VC and your Total Addressable Market (TAM) is not in the billions, your chances a decreased significantly. Understand your market…who it is, how big it is, how they buy, and how big the problem is.
  • Competition: First, don’t ever, ever say that you don’t have any competition. You might not have any direct competing businesses, but if there’s a problem, then you have competition, because somewhere somebody is solving that problem or the industry itself would not exist.  You have competition. Start with “how is your customer handling this today?”
  • Business model & distribution channels: How will you make money, and from whom? Identify your customer(s) and the various channels that are required to reach those customers. Web? Direct sales? Inside sales? Distributors? More different revenue streams is better.
  • Projections: This one is tough, because no matter what you put, it’s a guess, unless you’ve already got some real history.  But if you’re seeking VC, you have to be far along enough to make an intelligent, supportable estimate, and be prepared to back it up with real numbers.

That should get you started, but don’t just fill it and forget it.  Find a mentor (or two!) and get some help. If you’ve never tried – successfully or unsuccessfully) to raise venture capital, you will need help, and benefit from it.

What do you think about that?