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Indication of Interest

Definition

A preliminary, non-binding written expression of a buyer's interest in acquiring a company, typically submitted after reviewing a CIM but before substantive due diligence. An IOI usually includes a proposed valuation range, financing structure, key conditions, and timeline — serving the sell-side advisor as a first-pass signal of which buyers should advance to management meetings. An IOI precedes the more formal letter of intent (LOI) in most M&A processes.

Context

In Ep. 6, Dan Herr treats the IOI as both a mid-funnel pipeline stage and an output metric for measuring sourcing-team effectiveness. In the 10–15 stage CRM pipeline Dan advocates, IOI sits between "presented to IC" and "management meeting" as a clear milestone in a buyer's advancement toward a deal.

As an output metric, "IOIs submitted" is one of the leading indicators Dan uses to gauge whether a BD professional is on track. This matters most for evaluating ramping new BD hires — capital deployment outcomes can take 12–18 months, so Dan advocates measuring whether they're "getting stuff that's coming to investment committee that gets management meetings and IOIs" as early signals they're on the right path. (Ep. 6)

  • Letter of Intent — the binding successor to an IOI in the typical M&A funnel
  • CIM — the marketing document buyers review before submitting an IOI
  • Management Presentation — the process step that typically follows IOI submission
  • Investment Committee — the approval body that authorizes IOI submission
  • Deal Flow — the upstream pipeline that IOIs ultimately measure