Preliminary Investment Agreement
A Preliminary Investment Agreement (PIA), also often referred to as a Term Sheet, Letter of Intent (LOI), or Memorandum of Understanding (MOU), serves as a non-binding (with some exceptions) roadmap outlining the key terms and conditions under which a potential investment will be made. It’s a crucial step in the investment process, bridging the gap between initial interest and a definitive, legally binding investment agreement. Its primary purpose is to align the investor and the target company’s (or project’s) expectations, saving both parties time and resources by identifying potential deal-breakers early on.
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