From feld.com:
Agreements in business can come in the form o mergers, acquisitions, financing.
“Deal certainty” involves the likelihood of actually completing a deal. Deals can fall apart at any time, including after a LOI.
Activities that increase certainty
- Exclusivity period for evaluation
- Handshake
- Letter of intent
- Offer improved terms
Counterparty characteristics that reduce certainty
- Comes from a different industry (with a unique set of negotiating standards)
- Large amounts of capital being deployed in industry
- Unsophisticated investors
- No prior deal history