Teaser

Before a fund signs anything or sees any confidential numbers, it needs a reason to be interested. The teaser gives it one.

The workbook describes it as a "'teaser' or a 'flier' (a brief 1-3 page summary of the company and the opportunity)". It is sent out by the investment banker the company has appointed, to prospective funds identified "based on the business sector and investment criteria of the transaction".

It is deliberately short and deliberately not confidential. Its job is to let a fund manager decide one thing: whether the proposal has a preliminary fit with the fund's investment scheme, so that it can be pursued. Detail comes later, and only behind a non-disclosure agreement.

Where the teaser sits in the sequence (section 7.1.1):

1. The company appoints an investment bank or professional firm to run the fund raise.
2. The banker identifies a list of funds or portfolio managers by business sector and investment criteria.
3. The banker sends each a teaser.
4. The fund manager decides whether there is a preliminary fit. Typically about 25% of all leads and enquiries coming in are taken up for further processing.
5. If the investment team — investment managers supported by principals, associates and the research team — finds the teaser interesting, it negotiates and signs a non-disclosure agreement (NDA).
6. It then receives the company's Confidential Information Memorandum (CIM or simply IM), prepared by the investment bankers.

Why a banker sends it and not the company. The workbook says a direct representation by the company "is often counter-productive": VC and PE investors value the reference the banker brings; the company would not know which type of investor to target; there would be no external validation of its testimonials; and it may lack expertise in deal structuring, valuation and negotiation.

Why no NDA is needed yet. The NDA is used "especially" to share important technical information and is signed before the CIM. The teaser comes before that point, so it carries only what the company is content for a shortlisted fund to know.

Proprietary deals skip it. Where the fund has found the company itself, there is no banker's teaser; the investment team often signs an NDA directly with the target company.

Illustrative figures. Nagpur Agro Foods Pvt Ltd wants to raise Rs 120 crore of growth capital and appoints a mid-market investment bank. The bank draws up a list of 18 funds whose stated investment criteria include food processing and cheque sizes of Rs 50–150 crore, and sends each a two-page teaser:

There is no customer list, no plant-level costing and no management accounts — those will be in the CIM.

Of the 18 recipients, 5 reply that food processing fits their scheme and sign NDAs. Deccan Consumer Fund II is one. Its team reviews the teaser in a Monday pipeline meeting, confirms the sector and ticket size fit, and signs the NDA the same week. The other 13 decline, most because the ticket is outside their range — which is exactly the sorting the teaser is designed to do cheaply.

Chapter 7 (Investment Process and Governance of Funds) describes the teaser at 7.1.1 (Initial Assessment), as the first document a fund receives in a banker-run process. Expect questions on its length (1–3 pages), on who sends it (the company's investment banker), on what follows it (NDA, then CIM) and on the roughly 25% of leads taken forward.

• The teaser is 1–3 pages; it is not the CIM. The Confidential Information Memorandum is the detailed document, prepared by the investment bankers, and is received only after an NDA.
• The investment banker sends it, not the fund. The fund receives teasers.
• Teaser → NDA → CIM is the order. An NDA before a teaser is the wrong way round.
• Proprietary sourcing has no banker's teaser; the investment team often signs an NDA directly with the target.
• "Flier" is the workbook's other name for it — do not treat it as a different document.
• About 25% of leads are taken up for further processing; that is not the proportion that end up as investments.