Executive summaries that actually get read
It is the first section in the document and the last one you should write, because it is a summary of conclusions and you do not have conclusions until the model is built.
2 min readUpdated
One page, in this order
- What the business is
- Two sentences. What you sell, to whom, where. No adjectives that could belong to another company.
- Why now
- One or two sentences on what has changed. A business that could have been started identically five years ago invites the question of why it was not.
- The ask
- The exact amount, the instrument, and what it buys. “$250,000 of SBA 7(a) financing against a $340,000 project” beats “seeking investment”.
- The numbers
- Five of them, below. Stated flatly, with no hedging language around them.
- The evidence
- The one or two facts that make this credible: signed contracts, a prior exit, a waiting list, an existing book of business.
- What happens if you are wrong
- One sentence on the downside and how it is absorbed. Including it signals you have modelled it; omitting it signals you have not.
The five numbers
| Number | The question behind it |
|---|---|
| Revenue in year one and year three | Is this derived from drivers, or is it a growth rate applied to a guess? |
| The month you reach operating profit | Does the cash last that long, and is that the same month? |
| Gross margin | Is it inside the band for this industry, and if not, why not? |
| Coverage or runway | For debt: can it be serviced in the worst year. For equity: how long before you need more. |
| Owner compensation | Is the owner paid? A zero here is read as a mistake or as a fiction. |
Every one of those has to match the statements exactly. A summary figure that differs from the financial section by even a rounding step is the cheapest possible way to lose a reader, because it is the first thing they can check and the first thing they do check.
What to leave out
- The mission statement. Nobody has ever funded one.
- The market size, unless it is derived and you can show the derivation in the section that follows.
- Adjectives doing the work of evidence: innovative, disruptive, best-in-class, world-class.
- Anything you would not be able to defend if the reader stopped you mid-sentence.
Every rule here is enforced by the product.
The checks this article describes are the checks that run before a plan can be exported. Free to generate and read.