An early, non-binding note from a buyer saying roughly what they would pay and on what terms, usually as a range. It is a way to sort serious buyers from curious ones before anyone spends money on diligence.
Why it matters
Once several buyers have seen the CIM, a seller needs a way to work out which of
them are serious before spending time and money on deeper conversations with all of them. An
Indication of Interest — IOI — is that filter: a short, early, non-binding note from a buyer
saying roughly what they might pay and on what terms.
For a founder running a process with multiple interested parties, IOIs are what turn a list of
names into a shortlist. For a buyer, submitting one is a low-cost way to stay in a competitive
process without yet committing to anything real.
How it works
An IOI is typically a page or two: a price range rather than a fixed number, an outline of the
likely structure (cash, stock, an earnout, and roughly in what mix), the
buyer's rationale, and any major conditions they can already foresee, such as financing or
regulatory approval. None of it is legally binding in the way a signed contract is — it is a
statement of intent, not a commitment.
Because it is early and non-binding, an IOI is normally based on the CIM alone, without access to
detailed diligence material. Sellers use the range and the seriousness of the buyer's rationale to
decide who moves forward to the next stage, which is usually a more detailed
LOI once a smaller group of buyers remains.
On GetDeal
On GetDeal, expressing interest in a listing and moving into the Offer / LOI
stage of the deal room is the equivalent step to submitting an IOI in an offline process — a
signal that turns a browsing investor into a party actively being tracked through the deal, with
both sides seeing the same stage.
Invest in AI startupsthe Playbook — the deal stages, what each one unlocks, and which agreement is signed when
Questions people ask
- How is an IOI different from an LOI?
- An IOI is earlier, shorter, and looser: usually a price range and a rough sense of structure, based on limited information and non-binding in almost every respect. An LOI comes later, after more information has been exchanged, and is more detailed, more specific, and usually contains a handful of genuinely binding clauses such as exclusivity.
- Can a seller hold a buyer to the price in an IOI?
- No, not in the ordinary case. An indication of interest is deliberately non-binding, expressed as a range rather than a fixed figure, and intended to signal seriousness rather than lock in a price. A seller uses it to decide who to talk to further, not as a contract to enforce.
- Why would a buyer submit an IOI at all if it commits them to nothing?
- Because it is the entry ticket to a competitive process: sellers use IOIs to narrow down a longer list of interested parties, and a buyer who does not submit one is usually simply dropped from further conversation. It costs little to prepare and keeps a genuinely interested buyer in the running.
See also
More in Deal process
- CIM — The full written case for buying a company — what it does, how it makes money, its customers, its financials and its risks.
- Closing — The moment ownership actually changes hands and the money moves.
- Data room — The controlled place where a seller puts the documents a buyer needs — contracts, accounts, cap table, IP assignments.
- Disclosure schedule — The seller’s list of exceptions to the promises made in the contract.
- Due diligence — The buyer checking that the company is what it was said to be — financial, legal, technical, commercial.
Keep reading
Updated 2026-09-09