For every company a firm invests in, it looks at many more that it passes on. The exact ratio varies by firm and strategy, but the shape is the same everywhere: a wide funnel at the top, a narrow one at the bottom, and most of the work in between done by people.
Where the time goes
At the top of the funnel, the questions are basic. Is this the right legal entity? Who owns it? Is there anything in the public record that should stop the conversation now? How big is the market it says it serves? Answering them usually means searching registries, databases and news one company at a time.
That work is repetitive, and it competes for time with the deals that are further along. So it tends to be done quickly, or not at all, until a company reaches a later stage of review.
Why that matters more now
PwC's midyear outlook shows US deal value nearly doubling in the first five months of 2026 while deal count fell about 4%. Competition for good assets is intense, and processes move fast. A team that can screen more companies, earlier, sees more of the market and walks into first meetings better informed.
What good first-pass screening looks like
- It resolves the right entity, so you are not reading about a company with a similar name.
- It checks the external record across registries, liens, IP, sanctions and the market.
- It sorts what it finds into what should stop the deal, what needs a question and what is clear.
- It cites every finding, so the next person can pick it up without starting over.
The best time to find a deal-breaker is before anyone has spent a week on the deal. First-pass screening should be fast, consistent and sourced.