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