Letters of intent and pre-sales as validation

Letters of intent and pre-sales as validation

Letters of intent and pre-sales as validation work when a named buyer puts something on the line beyond polite interest: time in procurement, a written intent with clear scope, or money for a pilot or deposit. You are not collecting logos for a slide. You are testing whether someone with budget authority will move before the product exists. A non-binding letter can still be useful evidence if it names the problem, the buyer, and the next step. A transfer or invoice is stronger because it costs them something to reverse.

This is for founders and SME teams in Switzerland who sell to other businesses and hear “send us a letter and we will see”. It sits after problem interviews and before a full build. For the wider menu of tests, see how to validate a startup idea. Here the focus is B2B commitments on paper or in the bank, not consumer waitlists.

How to use letters of intent and pre-sales as validation

Treat each commitment as a test of one assumption, not as funding or as proof the product is finished.

1. State what you need to learn

   Example: “This buyer will allocate budget in Q3 for this job” or “They will pay CHF X for a four-week pilot”. If you cannot name the assumption, any signature is decoration.

2. Match the signal to the risk

   Problem validation needs pain stories. Solution validation needs a pilot or pre-sale. Distribution validation needs a channel partner who will not ghost after the press release.

3. Write the LOI so it can fail

   Include buyer name, scope, timeline, price or price range, and what happens next (contract, pilot start, security review). Vague “we are interested” letters are weak signals.

4. Prefer money or calendar when you can

   A paid pilot, a deposit, or a purchase order for phase one beats a friendly LOI that legal never saw. Ask what internal step turns the letter into a contract.

5. Log withdrawals honestly

   If three LOIs stall at the same gate (security, procurement, budget freeze), that is data. Do not count unsigned drafts or “we will sign after the demo” as validation.

What counts as evidence, and what does not

Strong signals: a signed LOI from a person who can spend, a dated pilot with success criteria, a pre-payment you can refund under clear terms, or a procurement ticket that moved because of your offer.

Weak signals: a template LOI with no name, a champion who cannot bring finance, “verbal yes” after a workshop, a letter that says “non-binding” and nothing else, or a single friendly customer who will not pay until every feature exists.

What letters of intent and pre-sales do not prove

Even a paid pilot leaves gaps. It does not show you can build the full product on your timeline, that unit economics work at scale, that other buyers behave the same way, or that the champion will survive a reorg. It does not protect the idea: ideas as such cannot be protected; execution and branding can (IGE on ideas).

A made-up example: compliance checklist for franchise groups

A made-up example: a founder sells a digital checklist for franchise auditors in Switzerland. After twelve problem interviews, one regional manager says they want it for twenty locations. The founder asks for validation, not a build mandate. The manager offers a one-page LOI: intent to run a paid pilot in two locations for six weeks, CHF 4’800 total, success measured by completed audits on time. Legal adds a standard non-binding clause and a data-processing rider. Finance approves the pilot as a professional expense. The founder delivers the pilot manually with a spreadsheet export behind the scenes. Four weeks in, one location uses it weekly; the other stops after week two because the local lead left. The LOI validated that one organisation would pay for a narrow pilot. It did not validate rollout to twenty sites or self-serve signup. The founder keeps the pilot revenue, documents the drop-off reason, and runs a second test with a different buyer type before writing production code.

Who should push for an LOI, and who should skip

When the Product Validation Package fits

The Product Validation Package fits when the problem and a buyer type look credible enough to test with a deployed product, paid acquisition, and measured usage, not when you still need the first signed LOI or a clear pilot scope. Weeks 1 to 4 ship a real app; weeks 5 onward show whether behaviour matches what the letter promised on paper. If you are earlier, stay in interviews and LOI design, and use the broader validation guide before you book a build conversation on the contact page.