Investment Teaser

What is an Investment Teaser?

Investment Teasers are market tools that financial firms use for different purposes but primarily for attracting investors to buy securities or investments.

It is defined as "a type of public statement issued by an issuer that does not yet offer securities for sale to the public but discusses certain business aspects relating to an issuer.

Before a company launches its IPO, it may send a telegram to potential investors with information about the initial public offering.

This message is an "IPO Teaser" or "Investment Teaser." This message aims to attract individuals and institutions interested in investing in the company's IPO before it is formally announced by the SEC or any other authority.

Typically, these telegrams contain only basic information regarding the business, such as earnings and revenue figures. The telegram is sent to motivate investors to buy the company's IPOs.

The company hopes to increase its IPO price, but selling these securities is often tricky, so companies hire these Teasers to help them raise more capital.

IPOs must be truthful, not misleading, and should not contain misrepresentations related to a security being issued or preliminary discussions on an offering.

They are used as periodic investment communications from firms that do not yet offer publicly priced security. For example, companies may release a newsletter or blog post about the firm's prospects.

By law, investment reports must disclose any material information about the company's activities that could influence a person's decision to buy shares of that company when it later offers claims for sale (i.e., provisions under Rule 10b-5).

It is a type of public statement issued by an issuer that does not yet offer securities for sale to the public but discusses certain business aspects relating to an issuer.

Competition between firms can result in teasers that are misleading or inaccurate, which can damage investor confidence. This is why SEC rules require that a registered securities official approve all investment teasers.

What should an Investment Teaser include?

Although many people may not be aware of this, writing an IPO or a teaser is a great way to get advertising for a business or organization.

"Investment teasers" are a new form of online marketing utilized by many companies.

As the name suggests, they aim to tease potential investors with videos or images that hint at what an investment will be used for in a company.

Despite their "impressive" marketing claims, this is a flashy and misleading tool for companies to manipulate people into making poor decisions with their money.

The idea is to make the viewer feel you are missing out on something if you don't go to the site right now because it's such a fantastic investment opportunity.

In reality, though, there needs to be more information and detail as they rely on a healthy dose of pre-determined assumptions and concepts that are more than likely unrealistic to be correct.

The teaser makes readers want to know more and read more about the business you are advertising.

In addition, it provides people with information about what will be happening in their own lives in the future by including promises that they can enjoy now. Therefore, several vital components must be present when creating a Teaser.

One of these components is "Research". There are significant reasons why a teaser must include research.

Research Your Target Market

The first step is creating a presentation and doing thorough research on the target market. Next, you want to make sure you know who your prospective investor or client will be.

For instance, if you are trying to attract a venture capitalist, they will have specific criteria they are looking for in a company they invest in.

They will also have concerns about where their money is going and the kind of regulations that the business you are investing in will be subject to.

On the other hand, if your target market is someone such as an individual stockholder or an employee at a corporation, they are likely to want information about what you plan to do with a specific product or service they can benefit from.

Once you know your target market, you must know what they need and how they prefer to receive it.

A great way of doing this is by creating a survey and passing it out in the area where you plan to start selling your products or services.

Explore Your Competitors' Presentations

The second step in creating a teaser presentation is looking at what your competitors are doing right and wrong.

By doing some research on what your competitors are using in their investment port, you can see the advantages of using their resources and information which you can use to create something better.

For instance, if you want to start a new restaurant business, find out what chain restaurants are doing well in your area: how they define success, how they present themselves or have presented themselves, etc.

Once you know what your competitors are doing, you can create a new investment proposal presentation for your business by incorporating the best aspects of theirs that will appeal to your target market.

However, you want to be careful about this; copying their presentation is very easy rather than creating something better.

Know Your Financials

The third step in creating an investment teaser presentation is to make sure you know how much money you need and how much money you're spending on expenses.

It would help if you also researched how much money is coming in and how much money is going out during the first year of operation. You also make sure you have a profit-and-loss statement and a balance sheet.

Once you have all of this information, it will be easier for you to plan the amount of money you can afford to spend on advertising and the amount of money your company needs for capital expenditures such as machinery or equipment.

Overall, several key components are necessary for knowing your finances, and many of them have been mentioned above.

Following these guidelines will make your investment presentation more effective to readers and attract buyers that can help build the company into a successful business.

Make Sure Your Teaser Is Right For Your Business

The fourth step in creating an investment proposal presentation is knowing what your product and service will be like. Research previous customers or users of your product or service and discuss ideas with them.

For instance, if you start a café, you may know what kind of atmosphere you want to create. However, the café must reflect your target market and the atmosphere they are looking for.

For instance, if you're trying to attract a young crowd, it's important that the café staff dress in trendy ways.

On the other hand, if your company sells office supplies on an Internet website and needs to appeal to more business executives who have time and money to spend on their investments (i.e., stockholders).

The products must be professionally prepared so they look better than someone with only a little money can afford.

Recap

The fifth step in creating an investment teaser presentation is ensuring you've included all the key points that your target market investor or client will want to know.

Always ensure that your investment presentation includes information on how the product or service you're offering works, how it benefits the consumer, and how it affects the economy.

This can include information about returns on investments and guidelines on selling. If your product or service has some kind of impact on the environment, it's also important to include this information.

You should also include information on the competition you plan to face and how your product or service will beat them out.

If you want to win investors or clients for your business, you must create a brief investment presentation showing why they should choose you.

The key is to know who they are, what they're interested in, and how they want to receive information.

You also don't want to copy anything from your competitors; instead, take their best aspects and combine them into something new.

Finally, ensure that the product or service you are offering has a clear advantage over other products or services in its category.

Advantages of an investment teaser

An investment teaser is a way to use a short video, presentation, and text report to persuade potential investors. But first, let's look at the advantages and disadvantages.

The benefits of an investment report are as follows:

1. They give you an overview of what's happening in markets, so you can make quick decisions on whether to invest.
2. Teasers are free, fast, and simple to distribute - they only take seconds to skim, and social media makes sharing easy for people worldwide. 
3. They don't require anything more than knowledge about your company or industry expertise.
4. Teasers work on a gut level - they instantly trigger emotions and therefore have much more impact than a newspaper article or report.
5. Teasers can be short videos, pictures, text, or infographics. A teaser is generally 200 words or less.
6. They can be used to raise awareness quickly before bigger-budget marketing campaigns have time to produce results.
7. They can be used as effective seller's tools to indicate the usefulness of a business and help you build credibility. 
8. Teasers are free and effortless, making them ideal for companies with limited funds or little experience in advertising and marketing.
9. There is no correct or incorrect way to use an IPO. Each company and industry has its marketing methods - so find out what works best for your business and your target audience.
10.  Investing in companies that use teasers is a bonus.

Limitations of an investment teaser

Recognizing these limitations is crucial for issuers and investors to ensure that decisions are grounded in comprehensive information and sound judgment. 

The limitations are as follows:

1. The release of the teaser may already impact the market price of your shares, even before you've made an official announcement about your IPO - and this can reduce their value. 
2. You need to ensure that your company is portrayed accurately in the teaser (e.g., in case there are any mistakes in the text or images).
3. It would help if you remembered that no one is looking for investment tips in teasers and most people see them as advertising, not as a tool for selling your company.
4. Investors' reduced attention span means they may forget about it quickly. So you need to be able to re-use the teaser across all media channels so that people continue to remember it and share it with their friends. 
5. The potential investor needs time to read the teaser and feel that they know enough about it to understand its benefits and risks.
6. A successful teaser is helpful only if you can use it as a lead-in for marketing a product or service. 
7. If misused, IPOs can do more harm than good. If the teaser doesn't work, you have wasted all that effort, and your potential investors won't appreciate it. 
8. Investment seekers need to find out if it will be helpful to them - or whether it will persuade them to invest.

Researched and authored by Amir Jamal Kaddoura | Linkedin

Reviewed and edited by Sakshi Uradi | LinkedIn

Free Resources

To continue learning and advancing your career, check out these additional helpful WSO resources:

• Capital Raising Process
• Initial Public Offering (IPO)
• Netting
• Public Information Book (PIB)
• Voting Trust