business proposal letter of intentA business proposal letter of intent (LOI) is a document used to make a basic offer, either binding or non-binding, in the context of an investment with principal members. The offer will be a monetary contribution towards partial ownership of a business, partnership, or real estate. The letter should include the amount being invested and the number of shares or percentage of ownership the investor will have.
What is a Business Proposal LOI?
A business proposal letter of intent is a document that has the power to act as a sign of good faith when intending to invest, and it can also act as a legally binding contract depending on how the document is constructed. This document gives the investor and the Principal Member(s) a wide range of options and conditions to cater to each party’s needs.
This business proposal letter of intent highlights the following key areas:
- Investment – Input details about key aspects to the investment and the Principal Members, including the investment idea, investor, investment amount, and the percentage ownership (if any).
- Financing – Can choose to make this agreement conditional or nonconditional based on the investor’s ability to obtain financing.
- Confidentiality – The investor has a fiduciary duty to keep information about the investment confidential unless written consent is granted.
- Investment Conditions – Allows the investor a reasonable amount of time to perform their due diligence and communicate with their clients, partners, and 3rd parties.
- Electronic Means (eSigning) – Language set herein that allows the document to be sent and signed electronically.