In short
AI analyzes a letter of intent by taking it apart term by term — cash at close, earnout, escrow, seller note, working-capital peg, exclusivity and conditions — and restating each offer as what the owner actually keeps, when, and with how much risk. Compared that way, the offer with the biggest headline number is often not the best deal, because headline price and money in your pocket are two different things.
How this guide breaks it down
A letter of intent leads with one big number, and that number is designed to win your signature. What determines your outcome is everything underneath it: how much is paid in cash at closing, how much depends on future performance, how much sits in escrow, what you are lending the buyer yourself, and what conditions have to be satisfied before any of it is real. Two LOIs with the same headline can differ enormously in what you actually receive.
| Term | What it really means for you |
|---|---|
| Cash at close | The only number that is certain. Everything else is a promise with conditions attached. |
| Earnout | Part of the price paid later, only if the business hits targets — usually while someone else is running it. The terms decide whether it is realistic or decorative. |
| Escrow / holdback | Money parked to cover claims the buyer might make after closing. Size and release schedule matter as much as the amount. |
| Seller note | You financing your own buyer. Fine in the right deal — but it makes you a creditor of a company you no longer control. |
| Working-capital peg | A quiet price adjustment at closing. Set wrong, it can claw back a meaningful piece of the headline number. |
| Exclusivity | Usually the only binding part. You stop talking to every other buyer — your leverage — for as long as it runs. |
| Conditions | Financing, diligence and approval outs. Each one is a way the deal can shrink or die after you have committed. |
When offers come in, our engine deconstructs each LOI into the same structure: guaranteed money versus contingent money, the timeline for each dollar, the realistic odds on the earnout given how the terms are written, the exposure you carry through escrow, the note and the reps you sign, and the cost of the exclusivity you are being asked to grant.
Then it lays the offers next to each other — not by headline, but by what you keep and what you risk under each one. The same engine has been watching deal risk from day one; the technology page shows where offer analysis fits in the full process.
This is the kind of work a good advisor has always done by hand for their biggest clients. The difference is that software does it exhaustively, on every offer, without fatigue and without a favorite.
An offer is only worth its odds of closing. A buyer who has closed deals like yours before, has financing in hand and asks for few conditions is worth more — at the same price — than one who is stretching. The analysis weighs who the buyer is, how they are funding the deal, and how much room the conditions give them to re-trade or walk. A slightly lower number from a certain closer is often the better deal, and the comparison makes that visible instead of leaving it to gut feel.
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Once you sign an LOI, exclusivity kicks in and your other options go quiet. That makes the days before signing the single most important decision point in the sale. Our process is built around it: the AI does the deconstruction, a senior member of our deal team walks you through what each offer really says and negotiates the terms that should move — and you decide.
Nothing is accepted, countered or signed without your written go-ahead. That division of labor — machine analysis, human negotiation, owner decision — is the heart of how we differ from a traditional process, which we lay out in AI vs. Broker.
Most of an LOI is non-binding — the price and structure are a statement of intent, not a contract. But the exclusivity clause usually is binding, and it is the part that costs you the most: once signed, you stop talking to every other buyer, often for months. That is why the moment to scrutinize an LOI is before you sign it, not after.
Not automatically. Compare offers on cash at close, how much of the price is contingent on earnouts or held in escrow, the working-capital peg, the conditions attached, and how likely each buyer is to actually close on the stated terms. A lower headline with more cash, fewer conditions and a proven closer frequently leaves the owner better off.
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General information only, researched and drafted with AI assistance — not legal, tax, financial or valuation advice. See our terms.