What is a letter of intent for B2B?
A letter of intent (LOI) for B2B is a short, signed document in which a business says it intends to buy your product once it meets agreed conditions. It names the buyer, the problem, what they would buy, roughly how much and how many, and when. It is non-binding: nobody owes anybody money because of it. Still, a manager who puts their name and company on paper is making a far bigger commitment than one who says “sounds interesting, keep me posted”.
Founders use LOIs in the gap between “we had good calls” and “we have paying customers”. They help you decide what to build first, and they give investors and grant reviewers something concrete: evidence from named companies instead of your own forecast.
When should you use it?
- Use it for B2B products with a long build or a long buying process: software for clinics, logistics tools, hardware for factories, anything that has to connect to the buyer’s own systems.
- Use it when you are raising money or applying for a grant and need proof of demand before you have revenue.
- Skip it for B2C. Consumers don’t sign letters; take a pre-sale instead.
- Skip it when the buyer could pay today. If a company can buy a 300 euro setup or a paid pilot now, ask for money. An LOI is the fallback when money can’t move yet.
How do you do it, step by step?
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Earn the right to ask. LOIs come after discovery, never before. You need 2 or more calls with the company, using problem interviews, where they described the problem, what it costs them, and what they tried. If they haven’t told you what the problem costs, they won’t sign anything.
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Find the person who can actually say yes. The enthusiastic team lead who loves your demo can’t commit the company. Ask: “Besides you, who would need to agree before your team starts using something like this?” The LOI should be signed by someone with budget authority, or co-signed.
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Draft one page, in plain language, with 8 parts. (1) Names of both parties and the date. (2) The problem in the buyer’s own words, quoted. (3) What you will deliver: 3 to 5 concrete features or outcomes. (4) Intended scope: number of users, sites or units. (5) An indicative price or price range and the payment model. (6) Conditions: what must be true for them to buy, say “connects to our current booking software”. (7) Timeline: target start date and a review date. (8) A non-binding clause: “This letter expresses intent only and creates no obligation to purchase.” You can make one clause binding, such as confidentiality, if you say so explicitly. A lawyer in your country can check the wording in under an hour.
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Ask in the meeting, then send the draft the same day. Script: “You told me missed visits cost you about 2,000 euros a month. We plan to deliver the first version in March. To decide what we build first, I’m asking 3 clinics to put their intent in writing. It’s one page and non-binding. Would you sign one if the terms look right?” If they hesitate, ask what would need to change.
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Make signing take 2 minutes. Send a PDF they can sign with the free Fill & Sign tool in Adobe Acrobat Reader, or any e-signature tool they already use. Pre-fill everything except the signature.
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Track every LOI in a sheet. Columns: company, signer, role, price agreed, volume, conditions, review date, status. This sheet becomes slide 6 of your investor deck and an appendix in grant applications.
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Keep the relationship warm. Send each signer a short update every 4 weeks. When the conditions are met, the LOI becomes the starting point for a contract or a paid pilot.
What does a worked example look like?
Say Inés, a hypothetical founder and former physiotherapist, is building a tool that fills cancelled appointment slots in small physio clinics from a waiting list. Over 5 weeks she interviews 12 clinic owners. Seven say empty slots cost them between 1,200 and 3,000 euros a month.
She asks 5 of those 7 for an LOI. Her letter states: up to 4 therapists per clinic, 79 euros per therapist per month, condition “works with our current booking software”, target start in April, review in May.
Three owners sign within a week. One asks for a price cap for the first year, which she adds. One says the decision belongs to her business partner, so Inés books a call with both. One declines: “we only lose a few slots, honestly.” That “no” is useful too. It tells her the problem is sharpest for clinics with 4 or more therapists, so she narrows her target.
With 4 signed LOIs worth a stated 15,000 euros a year, Inés applies to a regional startup grant and opens conversations with 2 angel investors. Both ask for the signers’ contact details to verify.
Which free tools help?
| Tool | What you use it for | Free plan |
|---|---|---|
| Google Docs | Drafting the one-page letter and exporting to PDF | Yes |
| Adobe Acrobat Reader | Signing a PDF with Fill & Sign | Yes, free app |
| Google Sheets | LOI tracker for investors and grant forms | Yes |
| Checking who holds budget authority | Yes, paid plans optional |
What mistakes should you avoid?
- Collecting LOIs from friends’ companies. Investors call signers. A letter from someone who signed as a favour falls apart on that call.
- Leaving out price. An LOI without a price range only proves interest in something free. Put a number in, even a range.
- Writing a contract in disguise. Legal-sounding pages scare people into sending it to their legal team, where it stalls for weeks. Keep it one page and plain.
- Getting signatures from fans without budget. A team lead’s signature is weaker than a director’s. Record the signer’s role honestly.
- Treating the LOI as the finish line. A signed letter that never turns into revenue counts against you at the next fundraise. Follow up.
How do you know it worked?
Our rule of thumb for a first B2B product:
- Go: 3 or more signed LOIs from companies in the same segment, each with a price and a named budget holder, out of 10 or fewer asks.
- Rework the offer: people agree on calls but won’t sign. Ask what blocks them; the answer is almost always price, scope or the wrong signer.
- Stop or narrow: fewer than 1 in 10 asks signs, even with a price range and no obligation. The problem isn’t urgent enough for this segment.
The strongest signal comes later: at least half of your LOIs converting into a paid pilot or contract once you deliver.
What should you do next?
Turn your best LOI into a paid pilot with success criteria both sides agree on, and summarise your offer in a one-page offer sheet you can reuse. If you plan to use the letters for funding, our list of free startup programs and grants shows where demand evidence counts. Founders who want help preparing these conversations can practise them in the Fe/male Switch startup game with an AI co-founder.
FAQ
Is a letter of intent legally binding?
An LOI is normally written to be non-binding, and you should say so in one clear sentence. Specific clauses such as confidentiality can be binding if the letter says they are. Rules differ by country, so ask a local lawyer to check your template once.
Do investors care about LOIs?
As evidence, an LOI ranks below revenue and well above survey results. They look at who signed, whether a price is named, and whether the signers confirm the letter on a call. Three solid LOIs from one segment carry more weight than 15 vague ones.
What is the difference between an LOI and an MOU?
A memorandum of understanding (MOU) describes how two parties plan to work together, such as a partnership. An LOI in this context states that one side intends to buy from the other. For a startup selling a product, the LOI is the one you want.
Updated 26 October 2026 · Written by the Fe/male Switch team