The Trend Is Toward Sending More Concise Information To Investors

When asked what information venture capitalists would like to receive with the initial contact, the respondents chose:

2-3 page Executive Summary: 56%
10-15 page "Mini" Business Plan: 22%
Full Business Plan: 14%
Information by telephone only: 7%
A cover letter describing the company: 1%

Over twice as many Venture Capitalists prefer receiving an executive summary to any other information.

The respondents who wished to be contacted by e-mail much preferred receiving an executive summary as an initial contact (73%) compared to all respondents (56%). Those who said they wished to be contacted by postal mail were more likely to ask for the whole business plan (29%) compared to the entire group (14%). Even among those who wished to be contacted by mail however, an executive summary was far and away the most preferred information to receive initially (54%). These results show the importance of making a strong impression with the executive summary, especially considering that the volume of submissions to venture capitalists is increasing so much.

It may be that the greatly increased volume of entrepreneurs presenting their companies has forced the VCs to make preliminary decisions in less time and on less information. The VC simply doesn't have the time to review an entire business plan. From the entrepreneur's standpoint, however, it is quite difficult to boil down all the key information about their company into a 2-3 page executive summary.

We must be careful to note that the executive summary is considered fine for an initial contact, but investors still expect a full business plan to be available should they express further interest.

The preference for e-mail contact may be a factor in the investors choosing to see an executive summary initially rather than a full business plan. Most business plans would have to be e-mailed as attachments. Attachments require time to download and print out. The executive summary simply could be included as part of the initial contact e-mail with no attachments necessary.