What is an LOI in an acquisition?

A letter of intent, or LOI, is the document a buyer sends once they are serious enough to want exclusivity but before they have done full diligence. It sets out the proposed price, structure, and timeline. Most of an LOI is non-binding — the price and terms are proposals, not commitments. But specific clauses usually are binding, most importantly exclusivity, which stops the seller talking to other buyers for a defined window, and confidentiality. That exclusivity window is why pre-LOI screening matters so much. Once you sign, your negotiating position narrows and the clock is running on diligence you are paying for. Work you can do before the LOI is worth disproportionately more than work you do after it.