Over the years, I have literally reviewed thousands of executives summaries. So has a colleague of mine, Jeremy Glaser, Co-Head of the National Venture Capital Practice at Mintz Levin. Jeremy and I have worked together to close deals worth hundreds of thousands of dollars over the past 15+ years, and in this video, we discuss some of the most common mistakes that we see in Executive Summaries.
There are 2 excellent nuggets of wisdom that will help you get out of the “pile of Executive Summaries” and into meetings with high quality investors. Watch this 2 minute clip:
Jeremy hit the nail on the head. As entrepreneurs, we sometimes forget to get inside the minds of the investors and talk about how THEY are going to make money by investing in the company. We often make the mistake of spending too much time describing the technology and not enough time outlining how we’re going to make money with it.
Don’t get me wrong, investors are interested in your technology – but I guarantee that they are more interested in how you are going to monetize it. And ultimately how they are going to get a return on their investment once they give you the money.
You should be excited about your technology – that passion is the fuel that got you where you are today, and it is the primary thing that will keep you motivated as you navigate to the next level of your company’s growth. You have put your blood, sweat and tears into building out your product/solution and you are proud that you can give your customers a better, faster or cheaper solution to a customer problem. And you should be proud of it.
AND, if you really want to convince an investor to write you a check, you need to also provide a solution to THEIR problem. Investors have a fund and they are responsible for producing a return on that investment. And they are expected to do that in an environment where the failure rate is 85% or more.
When you’re pitching investors – think of them as a customer. You want them to give you money. And they expect you to deliver a result. And the result that they need you to deliver is a cash return on their investment. So give equal time in your Executive Summary to talk about how you’re going to make money with your product/solution.
Think of it this way…when selling a complex or mission critical solution to a customer, you need to get into the head of your customer – understand how they think. What are their problems, their opportunities, their needs, their limitations?
It’s the same way with fundraising. When you’re attempting to raise money from an investor, you need to think like them.
In addition to your technology, investors expect your Executive Summary to clearly outline:
- Your pricing strategy, revenue model and breakeven sales volume.
- Your cost of customer acquisition.
- Your go-to-market strategy – how are you going to capture that first $1M in revenues?
- The The experience of your team, particularly if they’ve had successes in your market.
- Your revenue model, pricing strategy and how you will get customers.
If you would like a complimentary review of your Executive Summary, please email it directly to Luis@SmartMoneyStartups.com.