deal-structures
On live deals, “LOI” is the milestone: a signed letter of intent. Saying “we have an LOI” means exclusivity is likely in force and diligence can start — not that the company has been sold.
“Has the LOI been signed?” is a pipeline question. In a CRM or a deal pipeline, LOI is a stage between first bid and confirmatory diligence. Partners tell LPs they are “in LOI” the way venture investors say they are “in term sheet.” The legal anatomy is on Letter of Intent.
They think the price is done. What actually happened is that a range, a structure and a clock were written down. Confirmatory due diligence, the QoE, and the SPA can still move value by more than the gap between two LOIs.
A founder texts the board: “LOI in at €12m.” The document is non-binding on price, binding on 60-day exclusivity, and silent on net debt. Two weeks later the buyer’s FDD adds €1.5m of debt-like items. The LOI did its job — it started the clock — but it did not freeze economics.
Exclusivity and confidentiality are the ones that bite. A seller who keeps running a parallel process during a no-shop can face claims. A buyer who lets exclusivity lapse without a signed SPA is back in an auction, which is sometimes the seller’s plan.
Announcing an LOI as if it were closing. Using LOI and term sheet as interchangeable when one is an M&A sale and the other is a financing. Starting the VDR before the NDA because “the LOI is enough.”
LOI as a pipeline label hides quality. Two deals can both be “in LOI” with wildly different certainty.
Treat LOI as a permission to structure information, not as a valuation event. The companies that lose the least time after LOI are the ones whose data room was already a structured layer, not a ZIP file.