# Letter of intent

Concept · [Business and metrics](https://ecosystem.samcarlton.com/business)

Also called: LOI, LOIs, letter of interest, memorandum of understanding, MOU

A short document that sets out what two parties intend to agree on, such as a purchase once a product exists. As a whole it is usually not binding, though some of its terms, such as confidentiality, can be. [Common Paper](https://ecosystem.samcarlton.com/common-paper) publishes a free, standard template for a letter of intent to buy (Letter of Intent).

**For example:** A hospital signs a letter of intent saying it plans to buy a product when the product passes a security review. The [founder](https://ecosystem.samcarlton.com/founder) shows the letter to investors as a sign of demand.

## Connects to (6)

- [Pilot](https://ecosystem.samcarlton.com/pilot): A small, time-limited trial of a product with one customer, run to learn whether the product works for that customer before a full contract.
- [Traction](https://ecosystem.samcarlton.com/traction): Proof that real people want what you are building, such as paying customers, growing use or signed agreements.
- [Term sheet](https://ecosystem.samcarlton.com/term-sheet): A short document that lays out the main terms of a proposed investment, such as the amount, the valuation and the investor's rights.
- [Bookings](https://ecosystem.samcarlton.com/bookings): The total value of the contracts customers signed in a period.
- [Common Paper](https://ecosystem.samcarlton.com/common-paper): A contract company for startups that publishes free, standard agreements anyone may use and modify, along with software for sending…
- [DocuSign](https://ecosystem.samcarlton.com/docusign): A service for signing documents electronically.

Map view: https://ecosystem.samcarlton.com/letter-of-intent