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One Document Can Change Everything

You finally got the offer. A buyer is serious. They send over an LOI (Letter of Intent) — and it feels like the finish line is near.

But don’t celebrate just yet.

Because before you sign anything, there’s one question that can save your deal — and your sanity:

“Is this buyer qualified and committed to closing — or just locking me into exclusivity?”

Not All LOIs Are Created Equal

Most owners don’t realize: LOIs are often written to favor the buyer.

They lock you into exclusivity (meaning you can’t talk to other buyers), but they’re usually non-binding for the buyer.

That means:

  • They can walk away without penalty
  • They can renegotiate after due diligence
  • And you’re stuck on the sidelines for 60–90 days… with no backup plan

If you’re not careful, that LOI becomes a trap — not a ticket to closing.

What to Look for in an LOI (Before You Sign)

Ask these before saying yes:

  • Have they closed other deals before? Or is this their first?
  • Are they backed by capital or financing — or just “planning to raise it”?
  • Have they done due diligence already, or are they still fishing?
  • Do they seem like a strategic, cultural, and financial fit?
  • What terms are already clear — and what’s missing?

What to Do Now

Before you sign exclusivity:

  • Talk to a deal advisor or M&A lawyer — even for a quick review
  • Ask for a reverse diligence call — you interview them
  • Make sure the LOI outlines timeline, financing, and clear next steps

Remember: It’s okay to walk away. A good buyer won’t rush you into a bad deal.

One Quick Win You Can Do Today

Start a “LOI Diligence Checklist” in a doc or notebook.

Write down:

  • What would make you feel safe signing an LOI
  • What red flags would make you say no
  • The minimum you want spelled out in writing

Having this ready means when the offer comes — you’re not caught off guard.

Want help protecting your exit (and your peace of mind)?

Download the Exit Toolkit to prep your business and your strategy before you ever sign.