---
title: "What Is Letter of Intent? Private Equity Glossary"
description: "A letter of intent is a document that sets out the main terms of a proposed deal, such as price and structure, before the final contracts are signed."
url: https://capstreet.multisites.ai/glossary/letter-of-intent
publisher: Capstreet
phone: +1-713-332-2700
contact: https://capstreet.multisites.ai/contact
---

Process

# Letter of Intent

A letter of intent is a document that sets out the main terms of a proposed deal, such as price and structure, before the final contracts are signed.

A letter of intent, or LOI, is the first written offer in a sale. It states price, how you get paid, who stays, and how long the buyer gets to finish its checks. Most terms are not legally binding. A few, such as confidentiality and [exclusivity](https://capstreet.multisites.ai/glossary/exclusivity-period), usually are.

For example, an LOI might offer $30 million, with $24 million in cash at closing and $6 million in [rollover equity](https://capstreet.multisites.ai/glossary/rollover-equity). It might also give the buyer 60 days of exclusivity to finish [due diligence](https://capstreet.multisites.ai/glossary/due-diligence).

The LOI matters because it sets the shape of the deal. Changing a term later is hard, and the buyer may re-price if diligence finds problems. Read every line, and ask your lawyer to review it before you sign.

Learn what to check in the [letter of intent guide](https://capstreet.multisites.ai/guides/letter-of-intent).

[Read nextStart a conversation](https://capstreet.multisites.ai/contact)

## Related terms

-   [Exclusivity Period](https://capstreet.multisites.ai/glossary/exclusivity-period)
-   [Due Diligence](https://capstreet.multisites.ai/glossary/due-diligence)
-   [Rollover Equity](https://capstreet.multisites.ai/glossary/rollover-equity)

## Ready to get started? Let’s talk.

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[Start a conversation](https://capstreet.multisites.ai/contact)

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