A letter of intent (LOI) is similar to a memorandum of understanding (MOU) in that is a common agreement between businesses (including startups) and potential customers to define commitment, interest, terms, and pricing in writing prior to delivering the good or service. This document is used to clarify understanding of both the customer and founder and is often used by founders to show investors potential traction. LOI and MOU agreements are used interchangeably and are usually non-binding. At times, in working with customers on large projects with multiple phases where the customer and business work together before payment and services are exchanged an MOU may be used before an LOI is used to define pricing and terms. Also see Memorandum of Understanding (MOU).