When and Why to Use an Executive Summary Instead of a Business Plan

© 2006 by Joseph B. LaRocco; All Rights Reserved.

An Executive Summary can be used to weed out some of the investors who may have no intention of funding your company and may actually have an ulterior motive. Maybe they are thinking of funding a company similar to yours or that may compete with yours. Even worse, maybe last year they funded a competitor of yours and just want to get as much information from you as they can to protect their other investment.

Be careful when dealing with Venture Capital firms and don’t forget that it is okay to be protective of your Business Plan. Try to ask lots of questions of potential funding sources before you send them anything. Most importantly, find out what companies they currently have investments in so you can find out if they are just fishing for information with no intention of funding your company.

Another reason for doing a separate stand alone Executive Summary is to show potential investors, brokers, finders, friends and business contacts a condensed version of your Business Plan. It is much easier to read through 8-10 pages that target the strongest points you want to make than it is to read a 25-35 page Business Plan. You need to grab the attention of the reader and show the key points of your business model

The Executive Summary is a good way to break the ice and get your “story” out there to interested investors. Many of my clients use this strategy to help narrow the field of potential investors before they send out their full blown Business Plan.

Preparation of the Business Plan is a Vital First Step in your quest for capital, so a great deal of time and effort should be spent preparing the business plan.

Angel Investors: An Entrepreneur's Best Friend for Venture Capital Read why Angel Investors are your best source if you are looking for $100,000 to $1,000,000. This is a great place to start.

Essential Tips for Raising Venture Capital that will increase your funding chances and help you negotiate, even before you get to the term sheet stage.

Tips On Venture Capital Deal Terms - Part One This section starts out with a discussion about when you should ask potential investors about "deal terms". We then go on to discuss using a separate Executive Summary to save you time screening potential investors and to protect confidential information.