LOI Guide
An LOI is a promise to buy. It is non-binding except for exclusivity. Focus on price and payment timelines.
What is No-Shop Clause?
No-Shop Clause is A rule preventing you from talking to other buyers for a fixed period.
The 3 Core Benefits
Price Clarity
The LOI sets a specific price. Vague discussions become concrete numbers.
Fixed Timeline
It creates a schedule for closing. Get a clear deadline for the payout.
Official Validation
An LOI proves business value. It is a formal intent to acquire.
Negotiating Terms
Cash Upfront
Prefer cash today over future payments. Avoid long-term risks.
Asset Sale
Buyers prefer buying code. Sellers often prefer stock sales for tax reasons.
Working Capital
Clarify who keeps bank cash. Usually, the founder retains it.
Signing Blindly vs. Negotiating
| Feature | Signing Blindly | Negotiating |
|---|---|---|
| Exclusivity | Long | Short |
| Payment | Delayed | Upfront |
Frequently Asked Questions
Can I back out?
Yes. It is non-binding. But walking away hurts your reputation.
When hire lawyer?
Hire a lawyer before signing. They catch traps in the fine print.
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