Indication of Interest (IOI)

Last updated August 2, 2026

Quick Answer

An indication of interest is a non-binding letter stating a value range and the conditions attached to it, used to select who advances past the first round.¹

What it is

It typically carries the range, the proposed structure, the sources of financing, the remaining diligence the buyer needs, a timeline, and the approvals the buyer still has to obtain. It does not carry exclusivity. Its function is to let a seller cull a field on price and credibility together rather than on price alone.¹

Operational context

What good looks like

Why It Matters

An IOI is where financing conditionality first becomes visible and first gets scored. A buyer whose range is competitive but whose financing is uncommitted is not, from the seller's chair, offering the same bid.¹

Common mistakes

Confusing an IOI with an LOI. The IOI is a range with conditions and no exclusivity; the LOI is a number with exclusivity. Giving exclusivity at the IOI stage hands over the seller's only real leverage for free.Open workflow article

Term Family

Related concepts

Letter of Intent (LOI) in M&A

Frequently Asked Questions

What is Indication of Interest (IOI) in venture capital?

Why is Indication of Interest (IOI) important for startups?

Understanding Indication of Interest (IOI) is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.

Sources & References

1.T3-29 — Goodwin ProcterCrafting a Competitive LOI (May 2025)Goodwin Procter(An indication of interest is a non-binding letter stating a value range and the conditions attached to it, used to select who advances past the first round.)secondary · T3 · sell-side-process · document

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