Investment Letter of Intent Template

Updated: Nov 5, 2026

What Is an Investment Letter of Intent?

An investment letter of intent, also called an investment LOI or a letter to invest, is a letter in which a person or company offers to put money into a business in return for part ownership. The letter lists the main terms of the deal so both sides can agree on them before the longer paperwork starts.

The investment LOI belongs to the wider family of letters of intent, which cover purchases, leases and jobs as well as investments. This one deals with money for a share of a company or of real property.

Who Writes It and Who Receives It

The investor usually writes the letter. It goes to the principal shareholders, the owners who hold a significant share of the business and can agree to sell part of it. In the sample on this page, the investor is called the Buyer and the principal shareholders are called the Sellers.

When to Use a Letter of Intent to Invest

A letter of intent to invest fits the moment after the first talks and before the investment agreement, when the investor and the owners agree on the price and the shares in principle. The letter turns a spoken deal into written terms that both sides can check.

Common situations for an investment LOI:

• an equity investment in a private company in return for shares
• buying part of the issued and outstanding shares from the current owners
• funding an entrepreneur's idea in return for part ownership
• buying a share in real property with other owners

The letter also gives the company a formal notice of the investor's intention. If the parties later disagree about what the investor offered, the signed letter shows the terms they started from.

When a Different Document Fits

The investment LOI is the wrong document when no investor has made an offer yet. A company still looking for money writes an investment request letter or a proposal instead, and a deal with every term settled goes straight into the investment agreement.

Binding and Non-Binding Investment Letters

An investment letter of intent can be binding, non-binding or a mix of both, and the letter itself should say which. The choice decides whether the letter is the deal or only the starting point for the deal.

• Non-binding letter: the letter sets out the main terms for discussion. If the parties agree on them, they draw up a formal investment agreement.
• Binding letter: the parties settle the main terms in the letter itself and may not need a separate investment agreement later.
• Mixed letter: the deal terms stay open for talks, while chosen clauses, such as confidentiality, exclusivity and closing costs, bind the parties from signing.

The formal agreement clause and the deadline for the agreement matter most in a binding letter. A non-binding letter can leave out the deadline. A letter meant to bind no one should list every term that is not binding, the good faith clause included, or leave that clause out.

What to Include in an Investment Letter of Intent

An investment letter of intent covers the money, the ownership, the conditions and the closing. Each part below matches a clause of the letter and a step of the guide further down.

Investment Amount and Shares

The investment clause gives the amount of the contribution, the number of shares the investor buys and the ownership percentage those shares represent. The shares clause also says that the shares come free and clear of all liens, charges and encumbrances, so no lender or third party has a claim on them.

Financing Condition

The financing clause says whether the offer depends on the investor's ability to obtain financing. A letter with this condition is conditional; a letter without it is non-conditional. When the offer depends on a loan, the clause describes the loan and the share of the investment it covers.

Due Diligence and Access to Information

The due diligence clause gives the investor a period to review the company's materials before closing. It names the information the investor may see, the third parties the investor may talk to, such as accountants and advisers, and the investor's right to review and approve the materials.

Confidentiality, Exclusivity and Standstill

The confidentiality clause keeps the talks and the company's information private unless the parties give written consent. The exclusivity clause, also called a no-shop clause, stops the principal shareholders from discussing a sale of shares with other buyers. The standstill clause stops them from selling any part of the offered shares to third parties while the deal is open.

Closing Date and Closing Costs

The closing clause names the date when the investor pays the investment in full and the shares pass to the investor. The closing costs clause says who pays the expenses of the letter and of buying and selling the shares; a common choice is that each side pays its own.

General Clauses

The closing part of the letter holds the general clauses:

• the currency of the payment and the jurisdiction whose rules govern the letter
• delivery by electronic means that let the receiver print the letter
• severability, so one invalid clause leaves the rest of the letter in force
• acceptance: how the receiver accepts the offer and by what date

How to Fill Out an Investment Letter of Intent

An investment letter of intent is filled out clause by clause, in the order the terms appear, so each step below matches one part of the LOI. The investor usually completes it and sends it to the principal shareholders.

The Parties and the Deal

1. Write the effective date and a subject line that names the purpose, such as the purchase of shares of a named company.
2. Enter the investor's name and the name of the business that will receive the funds.
3. Write the investment amount in figures and in words, payable by the closing date.
4. List the principal shareholders who own a significant share of the business.
5. Give the number of shares to be bought and confirm they are free and clear of all liens, charges and encumbrances.
6. Describe the transaction: how much of the business the investor will own in return for the investment.

The Conditions

1. Say whether the investment depends on the investor getting financing, and if it does, describe the terms of that financing.
2. Give the investor and authorized third parties access to the company's information, and require the investor to keep it confidential unless the principal shareholders consent to its release.
3. Set the period the investor has to check the materials, perform due diligence and decide on the formal agreement.
4. Add the confidentiality of the negotiations, which only mutual consent of the parties can lift.
5. Set the time period for creating the formal agreement, if the letter is binding.
6. Commit both sides to good faith negotiations toward a formal investment agreement within the agreed timeframe.
7. Add the exclusivity clause, in which the principal shareholders agree not to discuss the sale of shares with third parties.
8. Add the standstill clause, in which the principal shareholders agree not to sell any portion of the offered shares to third parties.

The Closing and Signatures

1. Give the closing date.
2. Say who pays the closing costs, for example each side covers its own expenses for the LOI and for buying and selling the shares.
3. Name the currency of the payment and the jurisdiction whose rules govern the letter.
4. Say that delivery by electronic means that allow a printed copy counts as execution and delivery of the letter.
5. Add a severability clause, so an invalid clause does not affect the others.
6. Describe the acceptance, such as signing and returning a duplicate copy, and the date by which it happens.
7. Leave signature and date lines for the investor and for the principal shareholders.

How to Sign and Send the Letter

An investment letter of intent takes effect once the investor and the principal shareholders have both signed it. The investor signs first and sends the letter; the shareholders accept by signing and returning a copy.

1. Read the whole letter together with the other side and correct any name, figure or date that differs from your notes.
2. Sign and date the letter as the investor.
3. Send it to the principal shareholders on paper or by electronic means that allow a printed copy.
4. Ask the shareholders to sign and return the duplicate copy by the acceptance date in the letter.
5. Keep an original or duplicate copy with both signatures for each side, in a secure place such as a fireproof safe or a safe deposit box.

Investment Letter of Intent vs Investment Request Letter

An investment letter of intent comes from the investor, while an investment request letter comes from the company that wants money. The request letter asks investors for funds; the LOI answers with an offer on set terms.

An investment request letter, also called an investment opportunity letter or a letter to investors, describes the business, the amount it seeks, what the money will pay for and what the investor gets in return. An investment proposal is a longer version of the same pitch, often with a business plan attached.

Tips for Investors and Companies

An investment LOI works best when both sides read and check it before signing. These habits make the letter easier to rely on later.

• Both parties read the letter in full before anyone signs.
• The investor's signature appears on every copy, next to the principal shareholders' signatures.
• The figures in words match the figures in numbers.
• Each side keeps a copy with both signatures.
• The letter says plainly which clauses bind the parties and which do not.

Sample Investment Letter of Intent

The sample investment letter of intent below shows an investor named Dean Lion offering to buy half of the shares of a company called the H&Co Corp. The LOI lists the buyer, the investment sum, the shares, the financing and the closing date. Replace the names, figures and dates with your own details.

Frequently Asked Questions

These answers cover the questions the sections above leave open, from related documents to getting ready to write.

General information, not legal or tax advice.

Jennifer M. Settles

Author & Attorney

With over 25 years of experience as a business and transactional attorney, Jennifer has mastered the craft of closing highly successful deals for her clients. Through her wide-ranging expertise in commercial contracts, real estate transactions, M&A and corporate law, Jennifer secures results that are second-to-none.