Tout key selling pointsThese selling points are the key strengths of the business. Companies have certain key discrete value propositions that differ from company to company and from industry to industry. Here are some examples:
- Proprietary relationships with vendors: If a company is the only company (or one of a limited few) that can buy from a certain vendor, that’s a selling point you can trumpet in the teaser.
- Nature of customer relationships: For some Buyers, acquiring companies with Fortune 500 relationships is a main consideration. For others, selling to consumers or middle market companies is the key aspect.
- Average sale size: Some Buyers want to acquire companies that make large sales. The larger the average sale size, the faster/more easily the company can grow.
- Recurring revenue: Similar to average sale size, the holy grail of recurring revenue (revenue that occurs over and over again after making the initial sale; think of your cellphone bill) helps a company grow. A company doesn’t need to have 100 percent recurring revenue; the more the better, of course, but any amount of recurring revenue is worth mentioning in the teaser.
- Revenue growth: A company with growing top-line revenue usually has growing bottom-line profits.
- Profitability: The only thing better than a highly profitable company is a highly profitable company that’s growing.
- Proprietary whatever: If the company has proprietary software or processes — something that the competitors don’t have — that becomes a potential selling point.
- Industry Overview – A brief about the industry and the competitive landscape where the company operates
- Business Description – The company’s capabilities, along with the nature and type of products or services it offers to customers. One should ensure that this information is not copied directly from the company’s website, because then the reader might then be able to identify the company from reading the teaser.
- Location – It is important for the teaser to mention the location of the company’s headquarters. This enables potential buyers to think from a synergy perspective or look at a deal as a way to enter a new market. Financial Summary – This section of the teaser is very important, as many investors are only interested in investing in companies with a certain financial profile, such as small companies with revenues from US $5 million to US$ 50 million, or large companies with revenues in the range of US $100 million to US $500 million. The financial summary also provides forecasts of the target company’s EBITDA margins and other financial metrics. Investment Rationale – This section describes the USPs of the company and the reason(s) why investors should consider buying the business. Examples of investment rationale include recurring revenue, enterprise customers, concentrated customer base, latest technology, proprietary platforms, patents, etc. Customer Overview – Some teasers also highlight a few of the company’s customers, especially if they are major brands in the industry, to build credibility for the company.
- Transaction Structure – This section deals with the nature of the transaction as expected by the seller. It may be a complete sale of the business, a carve-out, venture financing, etc. Bankers Information – The teaser also mentions whether the sale process is taken up by an exclusive banker or is a joint venture by two or more banks. The contact details of the bankers are also mentioned, so that a potential buyer may easily get in touch with them for any kind of information or clarification they may seek.
The items in the list are just some examples. The teaser should highlight whatever makes the company special and different.
Qualities of an Effective Investment Teaser
1. Although there is no maximum page limit when preparing an Investment Teaser, the teaser should probably not exceed three pages in length. Otherwise, potential buyers may feel overwhelmed by the amount of information to process and lose interest.
2. It is crucial to only include key information and to keep the content concise.
3. The Investment Teaser should include relevant graphics to give potential buyers better insight into the products and/or services provided by the company.
4. The name of the company should not be disclosed in the document.
5. A well-written investment highlights section, company overview section, company products/services section, and financials section are crucial to building a successful Investment Teaser.
Contents of a TeaserBelow are important sections that should be included in every Teaser:
Click here to access Business Seller Toolkit Forms and Templates.