The LOI Scorecard Guide
- Oct 12
- 1 min read
How to Compare Offers (Beyond Just the Price)
Great LOIs differ less on headline price than on structure, risk, and certainty. A simple scorecard lets you compare apples to apples—and negotiate from strength.
Why use a scorecard?
Comparability: Replace gut feel with SUMPRODUCT—price plus terms on one scale.
Speed: Faster shortlists, clearer conversations.
Leverage: Show buyers exactly what lifts their score (and where to improve).
The 15 criteria that really decide outcomes
Enterprise Value (price level)
Cash at close (%)
Earn-out (share, mechanics, milestones)
Seller note (size, rate, covenants)
Rollover equity (alignment/liquidity)
Working-capital peg (method, level)
Escrow/holdback (size & duration)
Reps & warranties (RWI, caps, survival)
Exclusivity (days)
Financing certainty
Regulatory/approval risk
Time to close (weeks)
People plan (leadership, retention)
Customer/contract risk (assignability)
Cultural fit & post-close plan
SUMPRODUCT(scores, weights).
Use it in 10 minutes
Set weights (e.g., Price 14, RWI/Escrow 8 each…).
Score each LOI 0–3 and jot a brief rationale (“why 1, not 2?”).
Review total score—then tell each buyer where a +1 is possible (e.g., shorter survival, clearer WC peg).
Collect improvements, update scores, lock your shortlist.
Common pitfalls (and the shortcut)
“Highest price wins.” You’ll often lose on WC true-up, survival, exclusivity. Shortcut: scorecard.
Vague peg logic. Late surprises kill momentum. Shortcut: 13-month WC seasonality appendix.
Overlong exclusivity. Momentum dies. Shortcut: milestone-based exclusivity.
