Teaser Document
What Is a Teaser Document?
A teaser document is a short summary of a proposed stock offering or other investment that is distributed to likely purchasers in advance of its send off in public. It is intended to test interest in the target market for the offering being thought of.
The teaser document is by definition preliminary in nature and may not even uncover the name of the company thinking about the offering.
- A teaser document is a type of sensor conveyed to major investors to check interest in an investment opportunity.
- The teaser may not name the company thinking about the offering.
- On the off chance that the teaser produces interest, the company might follow up with a proper prospectus and a send off.
Understanding a Teaser Document
A teaser document is the principal provisional step towards a major financial move by a company, like an initial public offering or even the sale of the company.
The document is normally made by the staff of the investment bank employed to prepare the send off of the venture. Generally only a couple of pages long, it contains summary data about the responsible company and the investment opportunity it is offering.
The teaser document's purpose is to decide the demand for the security being referred to among institutional investors, hedge funds, and profound stashed individual investors. Best case scenario, the document might drive demand for the offering.
This casual document is typically the principal written notice of a public offering and might be followed by an initial prospectus, the last prospectus, and the [initial public offering](/initial public offering).
What's In a Teaser Document
The teaser generally contains not many hard realities and may feature a couple of positive insights concerning the company and its proposed offering. For instance, data on revenues might be accessible yet cost data might be excluded.
The teaser can be utilized to request indications of interest when a company is thinking about an initial public offering. The investment bank that wrote it can shop around the teaser as part of its endeavors to survey the market demand for the company's stock issue.
Assuming that the feedback is positive, it very well may be an indication that the company has a strong market for its offering. Assuming there is little interest, the company might opt to postpone or cancel the offering.
Orders for securities can't be accepted in view of the data in the teaser. A last prospectus must be issued before orders can be taken for the recently issued stock.
Points of interest to Include
Albeit the name of the company behind the offer might be discarded, a number of other key subtleties ought to be incorporated, as per the Corporate Finance Institute. These incorporate brief depictions of the company's line of business, major products, industry, key customers, past revenues, and projected future revenues.
The investment offered is defined however no prices are referenced.
The teaser document has been utilized to present ventures from initial stock offerings to partial buyouts or total buyouts of companies.
Utilizations of a Teaser Document
The teaser document has in recent years become the opening pitch opportunity for entrepreneurs startup founders. Its primary crowd is comprised of private equity firm executives, who might see many them in a year.
Hence, the rules for its creation have become as formal as those for a resume. In short, they are:
- Keep it short
- Keep it proficient
- Keep it authentic.
