Skip to main content
Alehar - Corporate Finance Advisory

Teaser

All Terms

Adjusted EBITDAAngel InvestorsAnti-Dilution ProvisionBootstrappingBridge LoanCap TableClawback ProvisionCommon StockControl PremiumConvertible NoteCovenantDCF ValuationDouble-Trigger AccelerationDrag-Along RightsDue DiligenceEarn-outEscrowExclusivityExit StrategyFinancial InvestorInformation MemorandumInitial Public Offering (IPO)LeverageLeveraged Buyout (LBO)Liquidation PreferenceManagement Buy-out (MBO)Mergers and Acquisitions (M&A)Mezzanine FinancingMultiples ValuationNon-Disclosure Agreement (NDA)Preferred StockPrivate Equity FundPro Rata RightsRecapitalizationRelative ValuationRepresentations & WarrantiesReverse MergerRoll-Up MergerShare Purchase Agreement (SPA)Special Purpose Acquisition Company (SPAC)Stock PaymentStrategic InvestorSynergiesTag-Along RightsTeaserTerm SheetValuation CapVesting ScheduleWaterfall Structure

What is a Teaser in M&A Transactions?

A teaser, also known as an investment teaser, is a brief document used in Mergers and Acquisitions (M&A) to spark interest among potential buyers or investors. It provides a high-level overview of the target company without disclosing its identity. The teaser is designed to entice interested parties to sign a Non-Disclosure Agreement (NDA) to receive more detailed information, typically in the form of a Confidential Information Memorandum (CIM).

How a Teaser Works

The teaser includes essential information that highlights the attractiveness of the target company. This typically involves:

  • Business Overview: A summary of what the company does, its market position, and its unique selling propositions.
  • Financial Highlights: Key financial metrics such as revenue, EBITDA, and growth rates.
  • Investment Rationale: Reasons why the company is an attractive investment, including growth opportunities, market trends, and strategic advantages.
  • Transaction Summary: Basic details about the transaction structure and what the seller is looking for in terms of partnership or sale.

The teaser is usually anonymous, avoiding the disclosure of the company’s name and other identifying details to maintain confidentiality until interested parties are vetted and sign an NDA.

Example

An example teaser might describe a mid-sized software company that specializes in cybersecurity solutions, highlighting its robust client base, proprietary technology, and consistent revenue growth. Financial highlights might show annual revenue of $50 million with an EBITDA margin of 20%. The investment rationale could point to increasing demand for cybersecurity services and the company's strong market position.

Advantages

Teasers provide a way to attract interest from potential buyers or investors without disclosing sensitive information prematurely. They help filter serious and interested parties from those who are merely curious, streamlining the M&A process. By presenting the business in an attractive light, teasers can generate competitive bidding, potentially driving up the valuation.

Disadvantages

The need to maintain anonymity can limit the amount of information shared, which may make it challenging to fully convey the company's value proposition. If not carefully crafted, a teaser might fail to capture the interest of potential buyers, missing out on potential opportunities. Additionally, there is always the risk that the teaser may fall into the hands of competitors, though typically mitigated by careful distribution and the subsequent NDA process.

‍

Need help with other corporate finance questions?

Alehar is an international boutique investment bank which works with startups, medium-sized businesses and investors. Our advisory services include Fundraising, M&A and Corporate Finance / Fractional CFO. 

We’re passionate about supporting business leaders and their companies with corporate finance and we’d love to help you. To talk to us and find out what Alehar can do for you, please use the section below to contact us, or email us at hello@alehar.com.

Related Terms

Adjusted EBITDA

Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a financial metric used to assess a company's operational performance. It modifies the standard EBITDA by excluding non-recurring, irregular, or non-cash expenses to provide a more accurate reflection of ongoing profitability.

Angel Investors

Angel investors are affluent individuals who provide capital to startups or early-stage companies in exchange for equity ownership or convertible debt. These investors often offer not only financial support but also valuable business expertise and mentorship.

Anti-Dilution Provision

An anti-dilution provision is a clause in an investment agreement that protects an investor from dilution of their ownership percentage in the event that new shares are issued at a price lower than the investor originally paid. It is commonly included in venture capital and private equity agreements.

Bootstrapping

Bootstrapping in business refers to starting and growing a company using personal finances or the company’s operating revenues, rather than relying on external funding or venture capital. Entrepreneurs use their own resources and reinvest profits from initial sales to fund further growth, emphasizing financial independence and careful cash flow management.

Bridge Loan

A bridge loan is a short-term loan used to meet immediate financing needs while waiting for more permanent funding. It serves as a temporary solution to bridge the gap between the need for funds and the availability of long-term financing.

Cap Table

A Cap Table, or Capitalization Table, is a detailed spreadsheet or document that outlines the equity ownership, types of shares, and ownership percentages of a company. It includes information on founders, investors, and employees, as well as the dilution of shares over time through various funding rounds and option grants.

See what Alehar can do for you

Get the freedom to focus on what you do best by partnering with our corporate finance team

Get in Touch