Key points
- Mandate fit is checked before merit
- First pass screening looks for reasons to stop
- Data room review tests every claim against a document
- Most declines are about preparation, not the business
An active institutional investor sees a continuous stream of opportunities: decks, teasers, referrals and introductions. It transacts on a small fraction of them. The process that turns the stream into a handful of investments is broadly similar across infrastructure funds, private equity, family offices and credit funds, and it is worth understanding in detail before you approach any of them.
Stage one: mandate fit
The first filter is not quality. It is fit. Before reading the substance, an investor checks whether the opportunity sits within its mandate:
- Sector and sub sector
- Stage and risk: development, construction, operational, growth or buyout
- Geography
- Ticket size, and whether it would lead or follow
- Capital type: equity, debt or hybrid
- Return and hold period
An opportunity outside the mandate is declined regardless of quality, usually with a short, generic reply. This is the most preventable rejection of all, because it means the approach should not have been made. Mandate matched introductions exist to avoid it.
Stage two: the first screen
An opportunity that fits the mandate gets a first read, typically of the teaser or deck. The reviewer is not trying to imagine what the company might become. They are looking for reasons to stop. The questions are consistent:
- Is the proposition clear? What is the asset or business, why now, and why this team.
- Is the capital requirement clear? How much, for what, on what basis, and what came before.
- Is the revenue credible? Contracted, evidenced, or honestly presented as projected.
- Is the sector evidence there? Grid and consent in energy, power in data centres, offtake in hydrogen, regulatory pathway in MedTech.
- Do the numbers hang together? Headline returns consistent with the stated assumptions.
Stage three: data room review
Opportunities that pass the first screen earn a data room request, and the standard rises. An analyst rebuilds or stress tests the financial model, checks claims against documents, and looks for gaps between the narrative and the evidence. An incomplete data room rarely produces a rejection letter; it produces silence, as the reviewer moves on to the next opportunity in the queue. Our guide to what to include in an investor data room sets out the standard.
Stage four: investment committee
A deal team that wants to proceed takes the opportunity to committee, first for approval to spend money on diligence, later for final approval. The committee asks the questions the deal team cannot yet answer. Every gap in your materials becomes a question the deal team must answer on your behalf, and they will not always choose to.
What the opportunities that progress have in common
They share no single sector, stage or story. What they share is preparation: they approached investors whose mandate fitted, their materials answered questions in the order a committee asks them, every claim mapped to a document, the model could be rebuilt, and the capital structure could be explained in one sentence. We list the reasons opportunities fail in why investors reject investment opportunities.
None of that is luck, and all of it can be tested before the first approach. That is the purpose of the Investor Readiness Review.
Before you approach the market. The Investor Readiness Review tells you what an investor will conclude from your materials, and what to fix first. £995 plus VAT.
This article is general information, not investment, legal, tax or financial advice. BriHel Capital introduces only and does not arrange transactions, provide advice, or carry out regulated activities.