Executive Summary For Capital Raising Business Plans
Posted by vcaustralia50 in 11. Feb, 2010, under Uncategorized
Strategic business plans that incorporate a lot of operational detail are not as likely to get read by investors despite what many entrepreneurs think. A investor business plan is important to your success in business however is not as critical as you might expect when raising capital. Many investors will not read beyond the executive summary if it doesn’t tempt them. In assessing between 10-30 businesses per month, investors and venture capitalists have to be ruthless and can’t just waste their time reading every proposal hoping that a more exciting proposition will come along at the end. Importantly the investor will draw conclusions from several facets of the proposition, such as the background of the management team to ascertain whether it is necessary to check out every last word written within the investment business plan.
The moral to the story – make the executive summary right.
The exec summary is a two-to-five page summation of the crucial points in the actual investment business plan.The exec summary is a 2 to 5 page summation of the fundamental points in the actual business strategy plan.An exec summary is a two to five page overview of the significant information in the actual strategic plan.
Generally speaking an investor will examine the executive summary and gauge whether the business and this investment really makes sense, whether management seem like they know what they are doing, and has been carefully thought through. Is this business genuinely going to take advantage of the suggested opportunity? They’ll also want to conclude that the timing of the venture is right – not too late & not too early. Cosmetically, the plan generally needs to be clear, succinct where it ought to be and broken down where suitable.
Remember the business thought does not have to be a paradigm shift, simple could be best and so where it is not do not make it any much more complex than it has to be.
To arrive on the above conclusions, a great executive summary would contain the following – and this really is as much a guide for what a good proposition looks like as what should be integrated in the executive summary:
1)The issue should be stated clearly, how large the issue is and that this problem is fitting for a company answer – following all not all problems in the planet ought to attract a business answer.
2)The industry should be developing and be big sufficient for an expense chance to create sense. Investing in a shrinking market isn’t an attractive proposition. Further, the investment will make much more feeling when the market discuss targeted is not a material discuss of the overall industry eg <5%, and still results in an attractive return for the investor.
3)The answer to the issue must be robust and protected against the competition, through a reasonably competitive edge, or branded protection all of which suggest the products or services will be interesting, which is critical. Additionally we must have a extensive overview from the competitors and what they have actually done and are likely to accomplish.
4)To be given uniqueness, the executive summary should state what the value proposal is to the end client, and determine that end consumer, and qualify the group targeted.
5)The management team must be introduced in short , (and in much more detail within the investor business plan, demonstrate why their history is appropriate for the business, and if they have not come from the business, show their motivation to seek suitable support.
6)The overview should demonstrate good financials, with a return 5 to 10 times within a five yr time period and note that recurring revenue lowers risk
7)The valuation must be sensible – consideration should be paid to industry standards – do this carefully as this what an investor will do. If there is one flag against management and entrepreneurs that often causes frustration it’s drastic valuations by entrepreneurs. It does nothing for management standing.
8)An exit should be stated, preferably with a range of targeted strategic partners quoted. So if you are seeking to become acquired…who are you ideal targets
If all these items were included within the executive summary, displayed clearly and concisely and made logical sense, an entrepreneur ought to expect strong results, subject of course to the correct numbers falling out and matching the investors expectations.
For more information on
visit the Venture Capital Centre at www.VentureCapitalCentre.com.au
Additional Links:
Business Plan Executive Summary For Growth Capital
Tips For Financial Modelling
Venture Capital Australai
Capital For Growth
