Business Plans - When and Why to Use an Executive Summary Instead
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 Angel 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 so you can streamline your funding process. Many of my clients use this strategy to help narrow the field of potential investors before they send out their full blown Business Plan.
You will find it harder dealing with Venture Capital Firms than you will with Angel Investors. Most Venture Capital Firms only fund large amounts of $5,000,000 or more, however, there are a few smaller and younger firms that might fund as little as $500,000. To help you out, here are some Essential Tips for Raising Venture Capital that will increase your funding chances and improve your negotiating skills, even before you get to the term sheet stage.
Author : Joseph B. LaRocco
Joseph B. LaRocco - Visit http://www.angel-and-venture-capital-guide.com for great tips and information on Business Plans, Venture Capital Financing and Angel Investor Financing. Mr. LaRocco has represented and advised private and public companies, broker-dealer firms, investment bankers and high net worth clients in the area of securities investments, private placements, compliance and due diligence. Mr. LaRocco is an attorney who proactices law in New Canaan, CT. He also has extensive experience advising hedge funds on numerous trading, regulatory and compliance issues. He is currently General Counsel and a Director of NetSky Holdings, Inc. (Symbol: NKYH) |
