Free Investment Letter of Intent (LOI) Template

An investment letter of intent (LOI) is a short document recording the main terms an investor and a company expect to put into a final investment agreement. It covers how much is being invested, what the investor receives in return, and what has to happen before the money moves.

Investors usually send one after early diligence, once the conversation has moved past general interest. The company negotiates the terms, both sides sign, and the lawyers begin drafting from an agreed starting point.

People often ask how this differs from a term sheet. In practice the two overlap heavily, and the label matters far less than the wording — both set out proposed terms, and both can mix binding and non-binding sections. Some investors use “term sheet” for a bulleted summary and “letter of intent” for the same content in letter form.

Reach for an investment LOI when both sides want the headline terms fixed before spending money on legal drafting. Situations where it earns its place include:

• An angel or seed investor is ready to commit and wants the valuation recorded.
• A company is negotiating with several investors and needs comparable written offers.
• A funding round depends on conditions, such as a lead investor or a minimum raise.
• Two businesses are structuring a joint venture and one is contributing the capital.
• An investor is buying into an existing company and needs board or shareholder approval first.
• A property or project investment requires appraisals and inspections before closing.

Very small or informal contributions between people who already have an agreement in place may not need one. Once the amount is significant, though, writing the terms down early prevents the expensive kind of misunderstanding.

An investment letter of intent (LOI) should answer the questions that would otherwise hold up the first draft of the definitive agreement.

The Parties

Name the investor and the company in full, including the exact legal entities that will sign. Add the state or country of formation where it helps identify them.

Investment Amount and Timing

State how much is being invested and when. A staged investment needs a schedule showing each tranche and what triggers it.

What the Investor Receives

Describe the instrument and the economics. Equity percentage, share class, convertible note terms, valuation or valuation cap, and any discount all belong here.

Use of Funds

Summarize what the money is for. Investors care about this, and companies benefit from setting expectations early rather than being asked later.

Governance and Information Rights

Note any board seat, observer right, voting arrangement, or reporting the investor expects. Silence here is a frequent source of friction after closing.

Conditions to Closing

List what must happen first. Completed due diligence, satisfactory financials, board approval, key-person agreements, and minimum-raise thresholds are typical.

Exclusivity and Confidentiality

Say whether the company agrees to pause other fundraising conversations, and for how long. Confidentiality normally covers the financials and the existence of the discussions.

Expiration and Signatures

Add an expiration date, signature lines for both sides, and the date. An offer with no end date is difficult for either party to plan around.

Most of the document is usually written to be non-binding, so neither side is committed to completing the investment. A small number of clauses are treated differently, and those deserve careful reading.

Clauses that are commonly binding:

• Confidentiality — protects financials, projections, and the fact that a raise is underway.
• Exclusivity or no-shop — pauses the company’s other investor conversations for a set window.
• Expense allocation — records who pays legal and diligence costs, and what happens if the deal dies.
• Governing law and dispute handling — sets which rules apply and how disagreements get resolved.

Say explicitly which sections you intend to bind the parties. Whether any given clause holds up depends on the wording and on where the parties are based, so this is not a place for ambiguity.

An investment letter of intent (LOI) comes together quickly once the commercial terms are settled. Document Genius walks you through each section with simple questions.

1. Identify the Parties and the Opportunity

Open with the date, name both entities, and describe the business or project in a sentence or two.

2. State the Amount and the Instrument

Give the figure and say what form the investment takes. Equity, convertible note, and SAFE-style instruments each carry different expectations, so name yours.

3. Set Out the Economics

Include valuation or cap, ownership percentage, and any liquidation or conversion mechanics you have agreed. Approximate figures should be labelled as approximate.

4. Describe Diligence and Conditions

Give the diligence window, say what the company will provide, and list every approval the deal depends on.

5. Mark the Binding Sections

Label clearly which clauses bind and which do not. One direct sentence here prevents most later arguments.

6. Add Dates, Sign, and Hand to Counsel

Include an expiration date, sign, request a countersignature, and send it to your lawyers as the basis for the definitive documents.

Read your investment letter of intent (LOI) against this list before signing. The document is short, but it sets the anchor for everything negotiated afterward.

• The figures agree throughout — amount, valuation, and percentage should reconcile.
• The instrument is named precisely, not described loosely.
• Every condition is one the parties can realistically satisfy.
• The exclusivity window is one the company can live with.
• The expiration date is present and sensible.

One point deserves emphasis on its own. Raising or making an investment is a regulated activity, and the rules that apply depend on where the parties are, who the investors are, and how the offering is structured. Nothing on this page is legal, tax, or investment advice. Have a securities attorney review the terms before you sign, and bring in an accountant on the tax treatment — both reviews are inexpensive next to the cost of getting the structure wrong.