Letter of Intent (LOI) Guide for Website Acquisitions
A letter of intent (LOI) is the document that moves a website acquisition from "interested" to "in process." It captures the agreed terms before either party spends money on lawyers or extended due diligence, and gives the buyer an exclusivity window to investigate without competing buyers in the picture. Used correctly, an LOI protects both the buyer and seller, and prevents misunderstandings that kill otherwise-good deals.
What is a letter of intent in a website acquisition?
An LOI is a short, mostly non-binding document, typically 1-3 pages, that summarizes the key terms a buyer and seller have agreed on before the formal Asset Purchase Agreement (APA) is drafted. It is not a contract. Signing an LOI does not obligate the buyer to purchase or the seller to sell at that price. What it does do:
- Aligns expectations, both parties confirm they agree on the big variables before spending time and money on due diligence and legal costs
- Starts the exclusivity period, the seller agrees not to market the site or negotiate with other buyers for a defined window (typically 14-30 days)
- Creates a paper trail, a signed LOI documents what was agreed and prevents either party from shifting the terms mid-process without renegotiating
- Opens the data room, the LOI signals sufficient buyer commitment to justify the seller providing full financial records, analytics access, and operational documentation
For deals under $25,000, the LOI is often optional, many direct deals proceed straight to a purchase agreement. For deals over $50,000, especially those involving seller financing, earnouts, or complex multi-asset structures, the LOI is strongly recommended.
What every website acquisition LOI should include
1. Purchase price and payment structure
State the total purchase price and how it will be paid: all-cash at closing, a split (e.g., 80% cash / 20% seller note), or a combination with an earnout tied to post-close performance. If seller financing is included, specify the interest rate, term (months), and repayment structure.
2. Assets included in the sale
List every asset transferring: domain name(s), website content, codebase, brand assets, social media accounts, email lists, affiliate program relationships, customer databases, supplier contracts, and any associated SaaS accounts or tools. Assets not listed may be disputed at closing. The more specific, the better.
3. Deal structure: asset purchase vs. entity purchase
Specify whether the deal is an asset purchase (buyer acquires specific assets, not the legal entity, most common for small deals) or an entity purchase (buyer acquires the LLC or corporation and all its assets and liabilities). Asset purchases are simpler and preferred by most buyers because they limit assumption of unknown liabilities.
4. Exclusivity period
This is the only truly critical binding provision. State the exact start date (date of signature), end date, and what the seller is prohibited from doing during the period: marketing the business, accepting other offers, or providing due diligence access to competing buyers. Typical length: 14-21 days for sub-$50k deals, 21-45 days for deals over $100k.
5. Due diligence period and access scope
Define how long the buyer has to conduct due diligence and what information the seller will provide: P&L statements, payment processor exports, GA4 / Search Console access, affiliate network dashboards, and hosting/infrastructure documentation. The more specific, the fewer disputes arise during the process.
6. Confidentiality clause
Reinforce the NDA (which should already be signed) by stating that all information exchanged during due diligence, financials, traffic data, customer information, is confidential and may not be shared with third parties or used for any purpose other than evaluating the acquisition.
7. Good-faith deposit (optional but recommended)
For deals over $50,000, a good-faith deposit (typically 3-5% of the purchase price held in escrow) demonstrates the buyer's seriousness. Specify the conditions under which the deposit is refundable (e.g., material misrepresentation by the seller or clean due diligence walk-away) vs. non-refundable (buyer walks away without a substantiated reason).
8. Non-binding statement
Explicitly state that the LOI is non-binding on the transaction, neither party is legally obligated to close, except for the exclusivity and confidentiality provisions, which are binding. Without this language, courts in some jurisdictions have found LOIs to create implied obligations.
Binding vs. non-binding provisions
The most common misunderstanding about LOIs is thinking that because the deal terms are non-binding, the entire document is meaningless. That is incorrect. A properly drafted LOI has both binding and non-binding sections:
| Provision | Binding? | What it means |
|---|---|---|
| Purchase price | Non-binding | Can be renegotiated after due diligence reveals material issues |
| Deal structure | Non-binding | Asset vs. entity purchase can still change before the APA is signed |
| Exclusivity period | Binding | Seller cannot market the site or negotiate with other buyers |
| Confidentiality clause | Binding | Disclosed information cannot be shared or used outside this deal |
| Good-faith deposit | Binding | Refund conditions are contractually enforceable |
| Obligation to close | Non-binding | Neither party is obligated to complete the transaction |
How to use an LOI: 7-step process
- 1
Agree on headline terms verbally
Before drafting the LOI, reach verbal agreement on purchase price, deal structure, and exclusivity period length. Drafting an LOI before verbal alignment means re-drafting it as negotiations shift, wasted time for both parties.
- 2
Draft the LOI using all required sections
Use the 8 sections above as a checklist. For deals over $50k, have a lawyer review the draft before sending. The buyer usually drafts the LOI and sends it to the seller, though sellers can also initiate if they want to standardize their transaction process.
- 3
Negotiate LOI terms before signing
Both parties should read carefully. Common negotiation points: exclusivity period length, deposit amount and refund conditions, scope of due diligence access, and what constitutes a 'material adverse finding' that allows the buyer to walk without losing their deposit.
- 4
Sign the LOI, exclusivity clock starts immediately
Once signed, the exclusivity period begins. Buyers should start due diligence the same day. Every day of the exclusivity window spent not investigating is time wasted. Sellers should prepare their data room in advance so the buyer can move quickly.
- 5
Complete due diligence
Request and verify: P&L statements (12 months minimum), payment processor exports, GA4 and Google Search Console access, affiliate and ad network data, hosting invoices, supplier or partner contracts, and legal documents. Document all discrepancies, these become renegotiation levers or walk-away triggers.
- 6
Proceed to APA or renegotiate
Clean due diligence leads directly to drafting the formal Asset Purchase Agreement. Material issues (revenue lower than claimed, undisclosed traffic decline, hidden technical debt) justify a price renegotiation. The LOI does not lock you into the original price if the facts don't match.
- 7
Fund escrow and close
Once the APA is signed, fund escrow. The seller transfers all assets. Escrow releases funds once the buyer confirms satisfactory transfer. The transition period, typically 2-4 weeks of seller support, begins at closing.
Common LOI mistakes, and how to avoid them
Mistake: Exclusivity period too short
Buyers who agree to 10-day exclusivity on a complex deal end up rushing due diligence or requesting an extension, which irritates the seller. Be realistic: if you need 21 days to properly verify the business, negotiate for 21 days up front.
Mistake: Vague asset list
Listing 'the website and all related assets' creates disputes at closing about what is or isn't included. Name every asset explicitly: the domain, the codebase, the GA4 property, the email list platform accounts, the social profiles, and any contracts.
Mistake: No non-binding statement
Without an explicit non-binding clause on deal terms, some jurisdictions interpret a signed LOI as creating legal obligations. Always include language stating the LOI is non-binding except for the exclusivity and confidentiality provisions.
Mistake: Omitting deposit refund conditions
If a good-faith deposit is included, specify precisely when it is refundable (seller misrepresentation, buyer walks away on legitimate due diligence findings) vs. forfeited (buyer walks away without substantiated reason). Ambiguity here causes disputes.
Mistake: Signing an LOI before NDA
The NDA should be signed before any detailed financials are exchanged, ideally before the LOI is even drafted. Some buyers skip the NDA thinking the LOI covers it. Always have a separate NDA in place first.
Mistake: Treating the LOI as the final deal
Some buyers relax after signing an LOI, thinking the deal is done. It isn't. The LOI only starts the process. Due diligence, price renegotiation, and APA negotiation all still lie ahead. Treat the LOI as the starting gun, not the finish line.
LOI quick reference
- When to use: Deals over $25k, or any deal with seller financing, earnout, or complex assets
- Length: 1-3 pages
- Binding: Exclusivity + confidentiality provisions only, deal terms are non-binding
- Exclusivity period: 14-21 days for sub-$50k; 21-60 days for larger deals
- Who drafts: Usually the buyer; seller reviews and negotiates
- What comes next: Due diligence, then the formal Asset Purchase Agreement (APA)
Common LOI questions
- Do I need a lawyer to write a website acquisition LOI?
- For deals under $25,000, most buyers and sellers handle the LOI themselves using a template, since the financial stakes are low and the LOI itself is non-binding on the transaction. For deals above $50,000, especially those involving seller financing, earnouts, or entity purchases, having a lawyer review or draft the LOI is strongly recommended. The LOI sets the frame for the entire negotiation; incorrect or missing provisions can be difficult to re-negotiate once both parties have anchored to the initial terms. The cost of a lawyer reviewing an LOI (typically $200-$500) is small relative to the deal size.
- What is the difference between an LOI and an NDA?
- An NDA (non-disclosure agreement) governs confidentiality, it prevents the buyer from sharing the seller's financial or operational information with third parties. An LOI (letter of intent) governs deal terms, it summarizes the agreed purchase price, structure, and exclusivity period. Most website acquisitions involve both: the NDA is signed first (before detailed financials are shared), and the LOI comes later after the buyer and seller have verbally agreed on headline terms. LOIs typically include a confidentiality clause reinforcing the NDA obligations, but the two documents serve different purposes.
- Can a seller accept another offer after signing an LOI?
- If the LOI contains a binding exclusivity clause, which all well-drafted LOIs should, the seller is legally prohibited from marketing the business or negotiating with other buyers during the exclusivity period. Violating this clause can expose the seller to a breach-of-contract claim and damages. If the buyer fails to close due to due diligence findings (not bad faith), the seller is generally free to re-engage with the market once the exclusivity period expires. Buyers who walk away for reasons not related to due diligence findings may lose any good-faith deposit.
- What happens after the LOI is signed?
- Once the LOI is signed, the exclusivity period begins and due diligence starts. The buyer requests access to financial records, analytics, affiliate program data, hosting infrastructure, and legal documents. Both parties begin negotiating the formal purchase agreement (typically an Asset Purchase Agreement or APA). If due diligence is clean, the APA is drafted, reviewed, signed, and escrow is funded. If due diligence reveals material issues, the buyer can either renegotiate the price, ask for seller representations to cover the risk, or walk away entirely.
Related guides
- Website Acquisition NDA Guide, the confidentiality agreement signed before detailed financials are shared, the step before the LOI
- How to Buy a Website, the full acquisition process from budget-setting through transfer
- Website Due Diligence Guide, what to verify once the LOI is signed and exclusivity begins
- How to Negotiate When Buying a Website, price anchoring, due diligence leverage, and terms beyond the purchase price
- How to Make an Offer on a Website, calculate your offer price, define all deal terms, and prepare proof of funds before submitting an LOI
- LOI Questions FAQ, common questions on binding provisions, exclusivity, and what happens next
- Legal & Tax FAQ, asset purchase vs. entity purchase, reps and warranties, and legal structures
- Website Acquisition Checklist, a 34-item checklist covering every phase including LOI and due diligence
- LOI glossary entry, plain-English definition and cross-links to related terms
- Exclusivity Period glossary entry, what exclusivity covers and typical duration ranges
- Escrow glossary entry, how funds are protected between LOI signing and transfer completion
- 10 Website Buying Mistakes to Avoid, the most costly LOI and due diligence errors first-time buyers make
- Website Acquisition Financing Guide, how to structure seller financing and SBA loans, terms that belong in your LOI
- Website Acquisition Timeline, how long each phase takes: LOI, due diligence, APA, and transfer
- Website APA Guide, what comes after the LOI: the binding contract, key clauses, and closing
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