The Importance of an Executive Summary

No one will read your business plan — unless your executive summary is convincing.
No one will read your business plan — unless your executive summary is convincing. (Image: Patrick Ryan/Lifesize/Getty Images)

Just like a good movie trailer compels you to watch the entire film, your executive summary is vital to winning and keeping the attention of prospective investors. Your executive summary is the first impression lenders, bankers and venture capitalists will get of your project. The opportunity should be clearly outlined in this document. Many times, it’s the only document investors will read. If you don’t have a compelling summary, you may have difficulty securing funding.

First Impressions

First impressions matter — a lot. Your executive summary is responsible for conveying the gravity of your project or business. Well-crafted summaries will pull the reader forward and convince her of the soundness of your business model. Poor quality summaries will often be tossed in the office shredder. Most venture capitalists agree that the most important part of the business plan is the executive summary, because it compels the reader to dive into the heart of your business concepts.

Opportunity Overview

Your executive summary is a sneak peek into the opportunity you’ve discovered. It highlights the problem your business solves efficiently. It also showcases your company’s distinct advantages over the competition. Effective summaries represent the culmination of research and data projecting the financial growth of your company. Furthermore, it shows how your team is uniquely experienced and qualified to keep all of these promises.

Most-Read Document

Many investors, venture capitalists and bankers are inundated with business plans and projects every week. As a result, decision-makers will read the executive summary to decide whether they will even read the entire business plan. It also shows how organized and experienced your enterprise is. Prospective investors expect the summary to contain the value proposition, and some believe that it can be one of the best vehicles for transferring your company’s core message.

Your Key to Startup Funding

The difference between a successfully funded company and one struggling to stay afloat might be linked to the strength of your executive summary. An executive summary condenses all of the reasons why your business is a financially responsible choice. The typical funding process will include due diligence, market research, background checks and underwriting. However, none of that will take place without a persuasive executive summary first sparking the interest of a would-be investor.

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