What is a letter of intent (sometimes called a term sheet)? Basically, it’s the precursor to a legal contract: a two to four page overview of the agreement between a buyer and seller of a business. It lays out all the terms of the transaction, such as purchase price, how that will be paid, assets sold, terms of non-compete agreement, etc.
Letters of intent are not binding agreements, those are made afterwards. They do have some very important benefits, however; when you hash out all the agreements before hiring your lawyers, you can save a fortune on legal fees. With all the grunt work done beforehand, lawyers can usually print up a sale document on the first or second draft. If you skip the letter of intent, the whole of your business arrangement and its conversion into legal language will be money in the lawyer’s pocket from both sides.
Here at Venture Opportunities INC, we’re happy to help you with all of your business-related needs: buying, selling, mergers and acquisitions, valuations, etc. For more information, please give us a call at (972) 783-1662.