Key M&A Document – The “Teaser”

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Key M&A Document – The “Teaser”

By Generational Group

05/22/2023

As you begin to prepare the documentation that you will need to present to potential buyers of your business, perhaps the one that is most critical is what we call the “teaser”. This is the 1-2 page summary of your company and is designed to make buyers pick up the phone and want more info.

The creation of effective teasers is both an art and a science and is one of the reasons that Generational has been so successful over the years: Our deal teams have decades of experience in writing teasers that work.

But if you don’t hire an advisory firm like Generational to represent you, it’s likely you will have to create your own teaser. Recently, Axial published a great article that summarizes the key features of effective teasers – you can read it here.

A couple of items they discussed are vital:

Your teaser must be accurate, interesting, and error-free. M&A Investment teasers should be focused on key business details such as revenue growth, profitability, and core company strengths. It must avoid long-winded low-value or hyperbolic descriptions of the history or management team. The goal is to make a concise, credible case for why the company is worth the focus and attention of the acquirer. It should also contain clear call-to-actions for acquirers to take the next step.

This paragraph contains some very important ideas. First, and most importantly, understand that the buyers you will be reaching out to, the true professional buyer, will look at hundreds of teasers every year. To capture their attention, keep it to the point.

One thing that really turns buyers off is long-winded descriptions that go back decades and decades and, in some cases, spend more time lauding the owner and his accomplishments and not the key info about the company. Avoid this at all costs. You may personally be very successful, but buyers are acquiring your company, not you.

Secondly, and most vitally, it must be error-free. Not only the top-line financial information but also your grammar, syntax and vocabulary must be exemplary. If a buyer shows interest, signs your NDA (another critical document), and delves deeply into your business only to find information that does not agree with your teaser, you will likely lose that buyer quickly.

And one final very, very important point that Axial points out:

Keep it anonymous. Never prematurely disclose the name of your company or other identifying information in the teaser. Prospective buyers will review the teaser prior to executing a confidentiality agreement, so make sure they cannot identify your company based on information contained in the teaser. Protecting anonymity preserves your company’s freedom of action, avoids having competitors spread false or damaging rumors, and avoids alarming your employees.

This can’t be overly stressed. It is a fine balancing act to disclose enough information about your business to attract attention but not too much that your confidentiality is compromised. Never release detailed information until a buyer has signed a confidentiality agreement or an NDA. If a buyer refuses to do so and/or presses you for more information before signing one, walk away. Protecting your business from non-professional buyers and confidentiality leaks is paramount.

This is another reason why Generational has been so successful: We know the buyers that we regularly deal with (we have over 35K registered buyers in our proprietary Dealforce database). If we find out that a buyer is unscrupulous and dealing with us in a nefarious manner, we never deal with them again. Protecting our clients from folks like that is one of the basic aspects of our process.

Hopefully these ideas will provide you with guidance if you are preparing your teaser on your own. Given how critical this document is (you only get one chance to make a first impression) it is highly recommended that you hire an experienced, reputable M&A advisory firm like Generational. Trust me, it is well worth the investment:

You can listen to more of our client reviews here.

If you would like to learn more about creating great teasers (and all the other documents you will need as well), I would encourage you to attend a Generational Growth and Exit Strategy Conference. We hold these throughout North America, there is no obligation on your part, and they are complimentary. To see our typical agenda, use this link.

Teasers are vital to your successful exit. Create a great one and it will benefit you in the long run.

Carl Doerksen is the Director of Corporate Development at Generational Equity.

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Key M&A Document – The “Teaser”

As you begin to prepare the documentation that you will need to present to potential buyers of your business, perhaps the one that is most critical is what we call the “teaser”. This is the 1-2 page summary of your company and is designed to make buyers pick up the phone and want more info.