The Most Important Page in an LOI

When an LOI lands, everyone flips to the same place: the number. Price gets the meeting, the champagne, the press release. But after enough transactions, I've come to believe the price page is the least informative page in the document.

The most important page is the one covering everything between signing and closing — exclusivity, conditions, who bears which risks while the deal is in motion. The boring page.

Why the middle pages matter more

A purchase price is a headline; the terms are the actual deal. Consider what actually varies between a good outcome and a bad one:

• Exclusivity length. A 90-day exclusive with vague milestones is an option you've written for free. Every week of exclusivity is a week your business is for sale and likely not being run.
• Conditions to close. "Subject to financing" and "subject to satisfactory diligence" are not conditions — they're outs. Count the genuine outs in the document. That number is the real probability of close.
• Working capital mechanics. More value is silently transferred in working capital pegs than in most price negotiations. Sellers learn this exactly once. Smart buyers also learn it once, others never really understand it.
• Who pays for the broken deal? Reverse termination fees, expense reimbursement, specific performance — the page nobody reads until the day everybody reads it.

The reframe

Here's the mental shift that helped me most: the LOI isn't a summary of the deal — it's the rules of the road and a glimpse of what's to come in the definitive agreement. The moment you sign, the leverage flips. The buyer who was courting you becomes the only buyer in the room, and every term you left "to be negotiated in definitive documents" gets negotiated against you.

So when the LOI lands, read the number once. Then read the middle pages three times, and ask of every paragraph: if this deal gets hard, who does this sentence protect?

The price tells you what they'll pay if everything goes well. The middle pages tell you what happens when it doesn't. Only one of those is new — hint: it's probably not the price, which has already been discussed.