Indication of Interest (IOI)

Key Highlights

• An Indication of Interest (IOI) is a non-binding statement made by a potential investor or buyer to express preliminary interest in a transaction.

• IOI is used in mergers & acquisitions (M&A), initial public offerings (IPO), private equity/venture capital and real estate or asset sales.

What is Indication of Interest (IOI)?

An Indication of Interest (IOI) is a non-binding statement made by a potential investor or buyer to express preliminary interest in a transaction. It’s often used in IPOs, mergers & acquisitions, or fundraising rounds to signal that a party may want to participate—without making a formal commitment.

Purpose of an IOI

An IOI helps to:

• Gauge market demand before finalizing a deal.

• Show that the investor or acquirer is seriously considering the opportunity.

• Start discussions and move toward deeper negotiations or due diligence.

• Give the seller or issuer a sense of valuation and deal structure expectations.

When is an IOI Used?

• Mergers & Acquisitions (M&A): A buyer sends an IOI before submitting a Letter of Intent (LOI).

• Initial Public Offerings (IPO): Institutional investors submit IOIs to show demand for shares before pricing.

• Private Equity/Venture Capital: Firms express interest in investing in a startup or company.

• Real Estate or Asset Sales: Used to pre-qualify buyers for large transactions.

What an IOI Typically Includes?

• Name of the interested party
• Target company or asset
• Indicative purchase price or investment amount
• Deal structure (e.g., cash, stock)
• Proposed timeline for due diligence and closing
• Conditions for moving forward
• Statement that the IOI is non-binding

IOI vs LOI (Letter of Intent)

Aspect	IOI	LOI
Binding	No	Partially or fully binding (in parts)
Detail Level	High-level/Indicative	More specific and detailed
Timing	Early in process	Closer to finalizing the deal
Use Case	To express interest	To outline agreed-upon key terms