---
title: "What Is No-Shop?"
term: "No-Shop"
description: "A no-shop clause restricts a company — usually during term sheet exclusivity or M&A — from soliciting or accepting competing offers for a defined period without the counterparty's consent."
date: 2026-07-25T00:00:00.000Z
updated: 2026-07-25T00:00:00.000Z
topics: ["venture-capital"]
source: https://venturecapitaltracker.com/glossary/no-shop
---

# What Is No-Shop?

> A no-shop clause restricts a company — usually during term sheet exclusivity or M&A — from soliciting or accepting competing offers for a defined period without the counterparty's consent.

**No-shop** (exclusivity) is a contractual promise not to actively market the company to other bidders or investors for a specified period while a lead party completes diligence and documentation.

### How it works

Venture term sheets commonly include 30–45 day no-shop periods from signing. The company may still receive unsolicited inbound interest but cannot solicit competing term sheets. M&A LOIs often add **no-talk** or narrower **no-shop** variants, plus **fiduciary out** language allowing the board to consider superior proposals if required by duty to shareholders.

Breach may trigger loss of the deal, expense reimbursement, or **break-up fees** in larger transactions. Founders should clarify whether the no-shop starts at term sheet or LOI and whether extensions require mutual consent.

No-shop is reciprocal in some deals — the buyer also commits resources to close — but venture practice is usually one-sided toward the lead investor.

### Why it matters

- **Founders:** Exclusivity is leverage you spend for commitment (lead name, price, timeline). Avoid open-ended no-shops; tie duration to documented milestones and keep parallel soft conversations legal under the exact carve-outs.
- **Investors:** Exclusivity protects process integrity. Lead investors invest partner time and legal costs expecting a fair shot at closing without a last-minute auction.

### Common mistake

Signing a long no-shop with a slow or non-committal counterparty while runway shortens. Pair exclusivity with clear closing deadlines and material adverse change protections.

### Related ideas

See also [letter of intent](/glossary/letter-of-intent), [break-up fee](/glossary/break-up-fee), term sheet exclusivity, and go-shop (the opposite in some PE sales).

## FAQ

### What is No-Shop in simple terms?

You agree not to shop the deal around for a set window — often 30 to 60 days while docs are drafted — so the investor or buyer can finish diligence without you running a parallel process. Fiduciary outs may still allow responding to unsolicited superior offers.

### Why does No-Shop matter?

For founders, it trades leverage for certainty and speed. For investors and acquirers, it reduces wasted legal fees and the risk of being used as a stalking horse while the company seeks a higher bid elsewhere.


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Source: https://venturecapitaltracker.com/glossary/no-shop