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Teaser

Definition - What does Teaser mean?

A teaser, or investment teaser, is a one or two-page summary letter that highlights the sales process and the qualities of a company for sale or an investment opportunity. The teaser is prepared by the seller (or the seller's advisor) on a no-name basis to maintain confidentiality. It is sent to prospective buyers in order to determine their initial interest in the opportunity. If the potential buyers are interested, they would then sign a Non-Disclosure Agreement (NDA) to keep matters confidential. Following the signed NDA, more detailed information about the company would be received, which usually comes in the form of a Confidential Information Memorandum (CIM).

Divestopedia explains Teaser

A teaser is the first contact with potential buyers, so it needs to create enough interest for the buyers to dedicate the time to pursue the acquisition further. Good teasers usually keep the potential buyers' investment criteria in mind, and they provide sufficient information and highlight the company's qualities that match this criteria.

At a minimum, a teaser should include:

  • A clear description of what services and/or products the company sells;
  • A financial summary of historical results and future projections;
  • The geographic area covered by the operations of the business;
  • Details regarding the industry, market and competitive landscape that the company operates in; and
  • Details on what type of transaction is being sought, i.e. management buyout (MBO), full sale, partial sale, etc.
It is also critical that the teaser maintain the seller's information as completely confidential. A seller should ensure that the teaser is simply not copied directly from the company's website. A good practice is to perform internet searches on phrases within the teaser to see if the search results come back with the company's website as the first hit.

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Resources

  • Equicapita: Equicapita
    Equicapita's model is to acquire established, private small and medium sized enterprises (“SMEs”) located primarily in Western Canada.
  • Evolution Capital: Evolution Capital
    Leaders in growing small business.