If you’ve ever explored selling your agency, you know how exciting it is to receive that first Letter of Intent (LOI).
It feels like validation — someone’s putting numbers on paper and saying,
“We want to buy your business.”
But here’s the reality: not every LOI is created equal.
Some are genuine and actionable.
Others are just fishing expeditions — designed to gather intel or test your reaction.The trick is knowing the difference.
1️⃣ Look for detailed, specific terms.
A strong LOI should clearly outline the key components of the deal:
Purchase price (and how it’s structured)
Payment terms (cash, earnout, equity, etc.)
Timeline for diligence and closing
Expectations for your role post-sale
Any exclusivity or confidentiality clauses
If it’s vague, missing numbers, or full of “TBDs,” that’s a red flag.
Vague LOIs lead to messy negotiations — or worse, wasted months.
2️⃣ Check who’s signing it — and what they’ve done before.
A serious LOI comes from someone with both the authority and the track record to close. If it’s a first-time buyer, individual, or fund with no history of closed deals, proceed with caution. Ask for references from previous sellers.
Good buyers will happily connect you with founders who’ve been through it.
3️⃣ Assess their timing and process.
Serious buyers move efficiently and transparently. They outline next steps clearly: “Here’s our diligence process, our team, and our target closing date.”
Non-serious buyers often drag things out, make excuses, or “go dark” after the LOI is signed. Momentum matters — and experienced buyers know how to maintain it.
4️⃣ Beware of “high-number traps.”
Some buyers float inflated LOI prices just to get exclusivity and push competitors away. Once you’re locked in, they “retrade” (reduce the price) during diligence based on “new findings.” A too-good-to-be-true number often is. A fair, well-supported offer from a reputable buyer is far better than a flashy number from a flaky one.
5️⃣ Look for signs of real investment.
Serious buyers put skin in the game — sometimes through earnest deposits, dedicated diligence teams, or clear legal counsel engagement. If someone’s not willing to spend time or money before exclusivity, they’re probably not going to after. A well-written LOI isn’t just a formality — it’s a signal of how the buyer operates. If they’re organized, transparent, and professional now, they’ll likely be the same through closing. If they’re sloppy or evasive, expect turbulence ahead.
In M&A, time is your most valuable resource. Don’t waste it on tire kickers.
Contact us if you’re and agency owner and have considered selling or joining something bigger.