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To The Letter

The path to a successful IPO starts with the crucial letter of intent.

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This story appears in the January 1996 issue of Entrepreneur. Subscribe »

In the world of initial public offerings for emerging entrepreneurial companies, the six most beautiful words in the universe are "We want to do your deal." Wow, what a rush. But the thrill of bagging the quarry quickly fades as the enormity of the next task comes into view: negotiating the letter of intent.

By definition, the letter of intent is the first legal document sent to a company from its underwriter setting forth the parameters of the deal, according to Nicholas Moceri, vice president of investment banking in the Providence, Rhode Island, office of Schneider Securities Inc. Moceri's firm specializes in raising capital for fast-growing technology companies primarily in the New England area. With most venture capitalists pouring money into established businesses in their existing portfolios, Moceri says, there's a shortage of early-stage capital that presents huge opportunities for investment banking companies like Schneider Securities.

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