Deal Terms
Letter of Intent (LOI)
A preliminary agreement outlining the key terms of a proposed transaction — similar to a term sheet but more commonly used in M&A contexts.
A Letter of Intent (LOI) is a preliminary, typically non-binding document that outlines the key terms of a proposed acquisition or investment. In M&A, an LOI from an acquirer establishes: proposed acquisition price (or price range), deal structure (asset vs. stock purchase, cash vs. equity consideration), key conditions to closing, exclusivity period, and timeline. LOIs are non-binding on the main deal terms but typically binding on exclusivity and confidentiality. Once an LOI is signed, both parties move into formal due diligence. In venture investing, term sheets serve a similar function to LOIs. The LOI signals serious intent without the full legal commitment of a definitive acquisition agreement.