IOI (Indication of Interest)

Definition

A short, non-binding letter naming a rough range to show real interest.

Why It Matters

Cheap to write and non-binding, it lets you signal real interest and earn a management meeting without opening the terms fight an LOI touches off. Confusing the weight of the two is a first-timer tell: an IOI floats a range, while the LOI that follows names one price and asks for exclusivity.

In numbers: An IOI might say 'we would value the business at $1,100,000 to $1,300,000, subject to diligence': a range, not a commitment, used to earn a management meeting. The LOI that follows names one price and asks for exclusivity; confusing the two documents' weight is a first-timer tell.