Letter of Intent (LOI)
Definition
A letter of intent is a mostly non-binding document expressing serious interest in a transaction (usually an acquisition) and sketching key terms before full negotiation.
How it comes up in fundraising
In M&A, the LOI starts exclusivity and diligence; in sales contexts, customer LOIs serve as traction evidence for pre-revenue startups.
Frequently asked questions
Is an LOI binding?
The commercial terms usually are not; provisions like exclusivity and confidentiality typically are. Read which parts bind before signing.
Do customer LOIs count as traction?
They are weak-but-real evidence at pre-seed, best when specific about intended purchase size and timing; paying pilots beat LOIs.
Related terms
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