Are IOIs worthwhile?

by a searcher from Harvard University - Harvard Business School

2 years ago

Hi everyone, I just kicked off a self funded search, https://www.sage-succession.com/. Are other searchers finding IOIs to be useful in gauging price expectations early? Or do you prefer to discuss price verbally and go straight to drafting an LOI if the deal meets your criteria? I've heard varying opinions on the topic. Thanks!

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searcher from Harvard University - Harvard Business School

Thanks for the feedback everyone!

2 years ago | like reply | 0 likes

searcher from Georgetown University - The McDonough School of Business

It depends on the deal. If it's broker driven, one of your first questions during an introductory email/meeting/call should be "what's the deal process? Any IOI/LOI deadlines?" Since you're self-funded, you're likely going to be looking at smaller companies with a <$7M purchase price and the deal process at that part of the market tends to not have an IOI stage, the broker just fields LOI offers whenever and there isn't much of a structured process. If it's a proprietary find, skip straight to an LOI. There's no need to confuse a small business owner with the difference between an IOI and an LOI.

2 years ago | like reply | 0 likes

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