How it works in a data room
The letter of intent marks the shift from marketing to verification. Once signed, the seller typically widens the buyer’s access: folders that were hidden during the competitive stage open up, and the buyer’s lawyers and accountants receive their own accounts. Many sellers keep the signed LOI itself in a restricted folder visible only to the deal leads, and use it as the reference for what the buyer has agreed to examine during confirmatory due diligence.
Why it matters in a deal
Although price and structure in an LOI are not usually binding, the exclusivity and confidentiality clauses typically are. That gives the buyer a protected window to investigate, and it gives the seller leverage to insist on a defined timetable. Both sides benefit from a room that is ready on day one of exclusivity, because the clock is already running. Our post on how long a data room stays open shows how this stage fits the overall timeline.
Example
A mid-market buyer signs an LOI to acquire a Texas HVAC contractor for a stated enterprise value, subject to diligence, with 60 days of exclusivity. The seller’s adviser opens the employee, insurance and customer contract folders to the buyer’s team the same afternoon. By day 45 the buyer’s open questions are nearly closed, the purchase agreement is in its third draft, and the parties sign within the exclusivity period.