How to write an executive overview for investors

Before you write your executive summary to solicit funding, consider incorporating it into the business strategy. It could be the initial part of your overall business strategy, or you could be preparing an executive summary as a separate document that you're planning to give out without the rest of your business plan.

My thoughts on this are based on the eight years I was an active participant in an angel investment group plus over ten actual angel investment transactions and participation in the Angel Capital Association.

Investors use executive summaries to identify potential opportunities

A practical executive summary can be beneficial in angel investment sites such as Gust, AngelList, and others to gauge the interest of potential candidates. Introductions are often followed by emails asking for a summary of the email but not complete business plans. You'll need to prepare an executive summary that makes investors want to read the entire item.

Investors must have a complete business plan to perform due diligence before evaluating potential candidates

We've not invested in a company that didn't have a plan, and your executive summaries are the primary factor in reviewing your business plan. The complete reading of your entire business plan will be available later on after we've narrowed down the summaries to a handful that are intriguing enough to warrant a thorough investigation.

For instance, 34% of us look over every executive summary sent to us within the group I am with. Everyone will look over summaries of plans that spark interest in the group, and half will review the rest of the programs only when we are still interested after reading the synopsis.

Provide previous startup experience or any specific industry experience

Make sure investors are aware of any prior startup experiences or specializations before starting since this can make a big difference. Investors typically recommend that you "bet on the jockey, not just the horse." Make it short with a brief mention of more details to follow, but be sure that you can support your assertions later.

Write down how much you are planning to raise as well as the way you intend to spend it

It is a summary, and more details will be added later. However, investors would like to quickly determine if your business is within their typical range of interests, and the method of obtaining money can make a difference. The idea of building inventory to fulfill already placed orders is far more secure than spending money to create a product that is in the design phase and is being prototyped.

In this case, valuation is a controversial topic. It is the amount you claim that your company has value and a number that determines how much of your ownership you will give away to investors. Confident investors require summaries to indicate how much money they can expect is worth and at what value; other investors prefer to determine the matter themselves and don't want companies pushing their valuation too early.

Discuss your exit strategy

The details can be left for the future, but investors need to know that you're aware that they can't make money until you have an exit within a couple of years, so they can buy shares and earn a profit. Many founders believe that they're just trying to succeed when actually, that's nothing without the eventuality of exit.

Make yourself persuasive but concentrate on the facts

You're trying to convince your potential investor to read further or make them want to fund your venture. However, remember that convincing lies on facts and not the language. So what will keep them engaged in the substance of the report rather than the tone? Evidence that there is traction, market potential, or experience with startups is far more persuasive than mere claims of excellence.

Avoid obvious cliches

There are a few apparent traps that you could be prone to If you're not cautious. For instance, please don't mention the team's dedication or passion -- they all share that trait. Therefore, it's not relevant. Likewise, if you claim your company is disruptive and game-changing, you'll lose even the next Facebook or something else. Instead, demonstrate that by providing facts, and let investors make the decision and not you.