Definition
Letter of Intent (LOI)
Non-binding term sheet that frames the deal — price, structure, exclusivity, and conditions to close.
An LOI is the document that turns interest into a process. It captures the headline economics (price, mix of cash and rollover, working-capital target), the structure (asset vs. share, stock vs. cash consideration), and the operating constraints between signing and closing — exclusivity, access to diligence, confidentiality. Most LOI provisions are explicitly non-binding; exclusivity and confidentiality are usually the exceptions. Treat the LOI as the scope document for diligence: anything you want time and access to investigate later should be referenced here.
See also
Read further in The Guide
Letter of Intent: Key Terms That Matter
What sophisticated buyers and sellers fight over in an LOI: price mechanism, exclusivity, conditions, no-shop carve-outs, and the binding vs non-binding split.
Managing the Exclusivity Period
How sell-side advisors and buyers should use the exclusivity window: deadlines, milestone gates, extension etiquette, and what to do when momentum stalls.