Letters Of Intent

“This is one of the few cases where radical transparency doesn't work is because it's distracting and people start to wonder what does it mean for me? And you don't actually know the answer. So there's no point in giving them radical transparency when you don't…”

“As a result, I think we spoke to 215 total buyers on an offer. We got 11 LOIs”

“Lois, which is what we call our legal operating intelligence system, that product is growing about 10% week over week.”

“We'll submit close to 200 LOIs a year for transactions.”

“Like, to me, LOIs are, I mean, those are, that's bullshit.”

“So I think the thing that we think about most is our single biggest advantage is time. If we're doing our job correctly, We are not looking at assets or looking at deals with a ton of competition where you have to have an LOI or a term sheet in within two week…”

“Since starting our company two years ago, we've tested our prototype In multiple hospitals, we've turned four LOIs into contracts”

“Once you sign the LOI now the buyer has all the power, and, like, if they back out, now you have to go back to the other buyers.”

“And the next day he reached out to me and he told me, Hey, let me just say just transfer a 10% retainer to your account. Just you know, we will sign a small LOI where we will say that it has to be refundable if the deal doesn't fall through, but otherwise, let…”

“Letters of intent, I think, generally speaking, don't carry a lot of weight, in my opinion. I'm sure some people disagree with me, but I don't think they do. But we then made them even less valuable, because we got people to sign them under the worst pretenses…”

“When you sign an LOI, absolutely have a follow-up call every single week until the deal closes. I don't care if you talk about the weather, or your favorite sports team that lost, whatever, or some really big issue, but constant communication, because that's w…”

“We throw out LOIs constantly. Like I have no qualms about that. They're not binding documents. You know, we'll send someone an offer and there's something about if I read an email and I say, Hey, I'll offer you two million dollars for your business. I don't th…”

“When you get an LOI, you know, factor in, you know, the probability of close as well, because you might go after that big extra 20%. Or maybe it was like a 10% difference in this case, but it might not close.”

“When you sign an LOI, don't stop selling. Do not stop selling the business. Like you're going to have all this stuff that the buyer wants. Right. What you should also always do is record like a loom on how marketing works, how sales works, how showcase me, you…”

“Sometimes the person who puts out like the first LOI typically is the buyer of the startup, even if there's many different LOIs.”

“People who just sell who send out premature LOIs. So like, they kind of don't, they haven't asked the right questions yet. They really haven't, you know, dove into the business with you. You haven't spoken with them. I do not recommend signing those LOIs becau…”

“One great question always asked is like, do you have, you know, do you have like plan, schedule, anything? And it's typically just like a list of, you know, sensitive questions that you'd be entering into after you sign the LOI, but it shows basically the expe…”

“You're still selling the business after you sell an LOI. And if you do that, sometimes if they find something maybe kind of small, you just shared with them a bunch of other stuff to get excited about, growth opportunities, et cetera, and that can keep the dea…”

“When you know, kind of don't have a timeline, buyers can really extrapolate that in a week and turn into a month. But when you have multiple parties interested and you put it into one day, say, Hey, we want LOIs on this day. That could be a very, very powerful…”

“I put it up and I think within sort of maybe three to four months, I got the first LOIs.”

“Contracts are worth much more than LOIs even if they have an out and even if they're not binding, but at least The reason a contract is worth so much more is that you've negotiated all of the other things that you need to discuss in the future. Whereas an LOI …”

“And I even recommend sometimes to price lower than you might expect, because then you'll draw on more buyers. There's no, if you have one buyer, you have no buyers. And so if you can get, you know, a bidding war going with a timeline saying, Hey, I'm looking t…”

“Basically the idea is you want to kind of front anything that are big enough that they could potentially turn the deal south if you don't agree to them kind of upfront.”

“When deals fall apart, they typically happen because something has come up in financial diligence. You know, income wasn't what you expected. Expenses were greater than what you expected, and so you typically don't want to be incurring a lot of legal fees unti…”

“And LOI and term sheets are nothing but just, whatever you think, just write it down. It's not that complicated. Just write down, like, okay, this is how much I'm gonna pay right now, this is how much I'll pay in the future, and so on and so forth.”

“Once you're in LOI, like, you know, if it takes 30 days, nah, say 60 days, who cares, really, it just goes through.”

“Trying to make sure that you're not disclosing too much to the wider team because you'd never know if it's really going to happen and you don't want to disrupt the business because ultimately everybody needs to make sure that the business is still, you know, r…”

“Generating letters of intent or agreements to pilot shouldn't be very hard if there's a lot of demand for this sort of thing. So being able just to get your customer to sign anything, even if it doesn't have a price on it, is evidence that you can sell to an i…”

“When I'm looking at buying companies, I know that once I issue an LOI, I'm significantly more invested. I've learned more about the CEO, the company financials, and the systems the team uses. I can still walk away, but it hurts more to walk away at that point.”

“I think the third and maybe the most important one is saying, hey, on this date, We're accepting LOIs, and beyond that, you're out, and we're moving forward with people who have crossed that threshold, right? And either submitted or signed up for ours, right? …”

“The first is making sure early on in the acquisition process, this is even pre-LOI or pre-execution phase, that there's a distinct shared vision between the two companies.”

“Between the LOI signing and the actual money being exchanged when the deal potentially closes, there's this big period of due diligence, and guys, this is like the graveyard. This is where deals fall apart.”

“Due diligence is a pain in the butt, but look, you have to keep leverage when you're doing these deals, and I had a hundred percent confidence that if it fell through, we could very easily go back to one of the other companies who made an offer in one of their…”