We are often asked by founders what they need to include in an executive summary that will be sent to prospective investors and what legal issues are involved.

If the executive summary will be sent only to “accredited investors,” the company may decide what information to provide, so long as it does not violate the antifraud prohibitions of the federal securities laws.  In addition, the company must be available to answer questions by prospective investors.

Therefore, a company has wide discretion in determining what information to include in the executive summary.  Judging from examples of successful executive summaries, most are two pages in length and include at least the following elements: 

  • industry or customer problem
  • company solution
  • market size and growth opportunity
  • distribution and sales, intellectual property
  • competitive advantage
  • business model
  • competition
  • executive team
  • financial projections and funding

The above outline need not be applied too rigidly, but from a legal perspective, it is most important to confirm that there is nothing misleading in the executive summary.  A final important element is not even in the executive summary; it is the letter or email that introduces your company to the investor and has the executive summary attached.  It is important to show your passion, focus and commitment but also to be consistent with the information in the executive summary.