First in the running order, but last to be written. If the pitch deck is a summary of the wider business plan, the executive summary is the thirty second distillation. It should not contain anything which is not set out in more detail in the rest of the pitch deck. Vice versa the pitch deck should not include vital narratives or figures not reflected in the executive summary.
Maybe that sounds obvious — after all, it is a summary of a larger body of work — but you would be surprised how often it is fluffed. People either write it first, and then deviate from it in the remainder of the pitch deck, or otherwise write it last (as they should) but introduce new concepts, key statistics or analogies not referred to anywhere else in the deck, as if these have sprung into the entrepreneur’ mind at the last moment.
This is the equivalent of writing a university admission statement in which you open with a line about a life-changing experience being taken hostage at sea by pirates, and later on either failing to refer it at all, or by which point it has morphed into a mildly traumatic episode in which you were mugged on a chain ferry. It erodes credibility and disrupts the all-important pitch deck narrative.
The time spent over each sentence should be far higher on the executive summary than on any other section of the pitch deck, since nowhere else is it more critical to be concise and persuasive. Assume that your reader has thirty seconds to review each pitch deck on her desk, in order to decide which of them warrants further attention.
How long should the executive summary be
This comes up a lot.
Short answer: 300 words maximum. Longer answer: it can depend on a couple of things.
- Who are you pitching to?
- What are you pitching for?
Who are you pitching to?
The general rule is that the more specialised your audience, the longer and more detailed your executive summary will need to be. Consider an example: you are an entrepreneur seeking finance to launch a business supplying stock monitoring software and hardware packages to onshore fish-farms on the Indian subcontinent.
“The general rule is that the more specialised your audience, the more detailed your executive summary will need to be.”
A generalist investor will likely not know the size of the Indian aquaculture industry. The generalist will not be aware of the margins associated with traditional fish-farming harvests, and nor will he or she understand the cleaning processes associated with freshwater lice (or even that such a creature exists).
In targeting a generalist investor, it would therefore be important to convey these “big picture” notions at the beginning of your executive summary:
- The Indian aquaculture industry is worth circa $18bn in annual revenues.
- Onshore fish-farming using traditional methods can yield $1m per ten thousand fish per biannual harvest.
- Fish health is hugely important for ethical reasons, and will also heavily impact yields, but the cost of monitoring and managing stock is expensive — up to $100k per ten thousand fish per harvest cycle — and traditional methods are notoriously ineffective, with low same sizes and high fatality rates amongst the fish inspected.
A specialist investor — for example a fish-farm conglomerate, or a fund which focuses on aquaculture — will know all of the above, and will also have seen a hundred or more pitches from entrepreneurs seeking to correct process inefficiencies.
Given you have a limited opportunity to “hook in” the investor, you would not waste three-hundred words setting a scene that he or she is already deeply familiar with. Instead, you might talk about the number of onshore farms in India, and their estimated total stock monitoring expenditure per annum – employing a level of granularity better suited to an expert than a layperson, and which on average will warrant in a slightly longer word count.
“All business plans should be capable of compression into their basic parts.”
But do not make the mistake of thinking that a highly technical business proposition needs a highly detailed executive summary. All business plans should be capable of compression into their basic parts. If you cannot manage this, then your business plan may be overly complex or, more likely, you have simply failed to understand the purpose of the executive summary.
What are you pitching for?
Whilst any investor worth his or her salt will approach a “ticket” (investment opportunity) with the same rigour, regardless of size, there is a proportionality consideration at play. If the investor’s average ticket size is £1m, how much time will he or she actually devote to a pitch for £50k of start-up capital? You could afford a briefer executive summary under such circumstances. However, there are actually some far more important questions for you to think about here.
Given the discrepancy between your ‘ask’ and the investor’s typical ticket size, are they even the right investor to approach? Most disciplined investors do not consider too-small investments (‘small’ in this case being a relative term) because of the cost inefficiencies associated with due diligence and review time. If a venture capital fund has £300m of capital to allocate on circa 20-30 positions (i.e. discrete investments), and a limited amount of analyst resource to spare, what a waste of time it would be to even read the pitch deck for a business raising ‘just’ £100k.
Read more about the importance of investor targeting here.
It is also the case that a heightened of detail — and therefore probably word count too — is required for later stage investment rounds. You can read more about investment rounds here, but the basic principle is this: the more mature your business, the more specific and detailed your business case should be. This may, but will not always, result in a longer executive summary.