They just mean you have a sales pipeline, nothing more.

Imagine you're an investor. Two guys with ideas of similar merit come in front of you. One has three signed (and admittedly meaningless) LOIs from potential customers and knows what to build. One has a prototype but is really unsure of the marketplace.

The investors I know pick the LOI guys every time, all other things being equal. It's the execution side of the "ideas vs execution" debate.