Definition
LOI
Letter of intent, the early signal Nick groveled for to prove demand.
From the episode “He Analyzed Millions of Calls. The Move That Closed Deals Was a Laugh”Hear it on the podcast1 episode
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Related terms in Startups & Fundraising
IP AcquisitionWhen a founder winds down a company but retains ownership of the technology they built — enabling a fresh start with proven assets, no team overhead, and full control over direction.IP assignmentTransferring intellectual property to the company so a founder cannot leave and start a competitor with it.IPOInitial public offering, taking a private company onto public markets.Liquidity eventAny transaction that converts founder equity into cash.Loss RatioThe percentage of investments in a fund's portfolio that return zero capital. Seed funds run high loss ratios; growth funds run low ones.LP Interest (Limited Partner Interest)A proportional ownership stake in a limited partnership fund, entitling the holder to a share of the fund's assets and returns without direct management authority over the underlying investments. In Collective Liquidity's exchange fund, contributors receive LP interests representing their proportional share of the diversified pool of private company shares. Unlike direct stock ownership, LP interests in a diversified fund provide quarterly liquidity (the fund provides a mechanism to borrow against or exit LP interest), can be used as collateral for lower-cost loans than single-stock concentration would allow, and enable access to wealth management strategies like donor-advised fund contributions that are impractical with illiquid single-company shares. The LP interest is the instrument that converts illiquid, concentrated private company equity into a more flexible, manageable financial asset.M&AMergers and acquisitions.Market TimingThe alignment between a product's launch and market conditions that make adoption natural. Mike's NFT metaverse startup succeeded in part because the timing was perfect during the 2021 boom; the same product would have failed 18 months earlier or later. A component of startup success that is not fully controllable but is prospectively analyzable — founders should assess timing explicitly before committing to a category rather than assuming a good idea will overcome a bad moment.