Business Plan Executive Summary For Investment Capital

Contrary to lots of entrepreneurs’ expectations most investors won’t read a complete business strategy plan, especially when the plan is more of an operational plan with too much detail. When raising capital your investment proposal is not as critical as you might think nonetheless it continues to be vitally important in your overall business success. If your proposal doesn’t interest an investor then many won’t read beyond the executive summary. Investors and venture capitalists could be evaluating between ten to thirty businesses monthly and have better things to be doing than just hoping the main body in the plan comes up with a more exciting proposition than the executive summary. Many other facets of the proposition may also help investors determine the history and credibility of the management team in addition to a number of other conclusions and understand how much detail they require to comprehend from the proposal.

The the message in the story – make the executive summary spot on.

The executive summary is a two-to-five page summary of the crucial issues in the strategic plan.

Normally an investor will analyse the executive summary and gauge whether or not the business model and this investment decision really makes sense, whether management seem like they know what they are doing, and has been thoroughly thought through. Is this business genuinely going to exploit the stated opportunity? They will also want to conclude that the timing in the venture is appropriate – not too late & not too early. Cosmetically, the plan generally speaking needs to be clear, concise where it has to be and broken down where suitable.

Remember the business thought doesn’t have to be a paradigm shift, easy can be greatest and so wherever it isn’t do not allow it to be any much more complex than it has to become.

To arrive at the above conclusions, a excellent executive summary would contain the subsequent – and this really is as significantly a information for what a good proposition appears like as what should be included within the executive summary:

1- The issue must be stated clearly, how large the issue is and that this problem is fitting for the business solution – after all not all problems within the planet ought to attract a business answer.

2- The market should be growing and be large enough for an investment opportunity to make sense. Investing in the shrinking industry isn’t an appealing proposition. Additionally, the expense will make more sense when the industry discuss targeted isn’t a material share from the general industry eg <5%, and still results in an appealing return for the investor.

3- The solution to the issue should be robust and shielded against the competition, through a reasonably competitive edge, or trademarked protection all of which suggest the service or product will be outstanding, which is crucial. Further we must have a wide understanding of the opposition and what they have accomplished and are likely to accomplish.

4- To be given uniqueness, the executive summary must state what the value proposal is to the end consumer, and specify that end consumer, and qualify the group targeted.

5- The management team should be introduced briefly (and in more detail within the strategic business plan, illustrate why their background is appropriate for the business, and if they have not come from the business, show their desire to seek proper support.

6- The summary should demonstrate strong financials, with a return 5-10 times within a 5 year time period and note that recurring revenue reduces risk

7- The valuation must be reasonable – 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 regularly causes frustration it is extreme valuations by entrepreneurs. It does nothing for management standing.

8- An exit should be stipulated, if possible with a range of specific strategic partners quoted. So if you are seeking to become acquired…who are you ideal targets

If all these points were integrated within the business plan executive summary, displayed clearly and concisely and made logical sense, an entrepreneur should expect strong results, subject of course to the proper numbers falling out and matching the investors expectations.

Visit the Venture Capital Centre at www.VentureCapitalCentre.com.au for information and resources on Understanding Venture Capital And Private Equity

Additional Links:
Venture Capital Business Plan Executive Summary
Business Plan Venture Capital Australia
Book Called Invest To Exit
Raising Capital For Your Organisation