Steps to Growth Capital Self-Study GuideStep 5

5.4 Why the Executive Summary Is Important

The executive summary is a unique component in the investment proposal. It is a synopsis, placed near the beginning of the proposal, of all the information contained in the rest of the proposal. The other parts of the proposal will be covered in more detail later in this Step.

The executive summary should be designed primarily to capture the investors' interest and to entice them to read the following sections of the proposal. It gives an overview of the company and provides the highlights of your investment proposal.

Keep It Short, Keep It Snappy

• Limit your executive summary to two to four pages.
  
• Write it as a stand-alone document.
  
• If the executive summary is vague, investors won't read it.
  
• If investors don't read it, they'll never make it through the rest of the document. And you'll have missed a golden opportunity.
  
• Charts, graphs and tables are a great way to display large volumes of information, especially in the executive summary.

See the New Tech Case Example for a sample of an executive summary.

Executive Summary Must-Haves

Company Description

Describe your company. Give an overview of its structure and major players. Briefly describe your company's purpose in the marketplace, your products and services, and your management team.

Investment Needed

State how much money your company needs, when you need it and what it's needed for.

Financial Track Record

Give your company's key financial results, both historical (two years) and projected (three to five years).

Exit Strategies

Outline potential exit strategies for investors.

When you've prepared a draft, read it over from the investors' point of view. Here's a checklist to help you evaluate your draft.

Executive Summary Checklist

Be sure to address the four critical conditions that investors are sure to look for. Have you:

• showed investors how much they can expect to earn from the deal (an acceptable rate of return)?
• given evidence that your team members have the business and management skills to carry the project through to a successful conclusion (confidence in management)?
• provided measures to help them protect their interest (the ability to monitor and control their investment)?
• given investors a viable exit strategy and options to realize their investment?

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