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Technology is the key to faster, more efficient deal screening
In the current dynamic, fast-paced investment environment, being able to efficiently screen and identify high-quality deals is essential for success—while an inability to do so leads to missed opportunities. When processes are inefficient and evaluation criteria are unclear, you lose valuable time and resources. Failing to keep up with the market means you might even miss your next great investment.
By combining a clearly defined investment strategy with the right technology, your team can not only streamline deal screening but also multiply your capacity to assess opportunities tenfold.
A robust deal screening process involves critical components:
- A set of well-defined criteria for identifying potential deals
- A consistent—and speedy—evaluation approach
- A streamlined process that keeps the whole team in sync
However, many investment teams still face obstacles that are slowing down pipeline growth and impeding their ability to make informed decisions quickly and with confidence. Let’s look at the most common challenges when it comes to efficient deal-screening and how the right technology solution paired with revamped processes can help you overcome them to achieve next-level efficiency.
Challenge #1: Too many deals, too little time
Investment teams today often find themselves overwhelmed by the sheer volume of new opportunities flooding in daily. Weeding out the potential investment opportunities from those that don’t align to your firm’s needs and goals takes a lot of time—especially when you’re manually sifting through documents and information to find what’s really needed to screen each deal effectively.
For starters, crucial information is often scattered throughout lengthy offering memorandums. Teams must perform tedious manual work to extract those tidbits and then input them into an Excel spreadsheet for further analysis.
Off-market deals present another unique challenge, as information can arrive piecemeal and in various formats. Before you can analyze it, you have to identify, extract, and compile the pertinent information into a single format or document. Again, gathering the critical information together to make effective analysis possible is tedious and time-consuming.
Without a clearly defined process to follow, initial decisions about which deals to focus on are often based on crude heuristics, such as broker recommendations, sector, and location. With this approach, teams can end up spending too much time on the wrong deals. Oftentimes you don’t realize a deal isn’t a good fit until you’ve invested significant time into a thorough review. This leads to delayed decision-making and inefficient resource allocation, both of which can hinder your ability to capitalize on the best opportunities.
The bottom line: it’s time to stop wasting valuable time and resources on potentially unsuitable deals.
How technology can help
Automated deal extraction and deal creation
With a purpose-built deal management platform, you can automatically extract data from broker and seller files, creating analyses that are populated with relevant and actionable information. This eliminates the need for your team to manually review files, extract data, and input it into spreadsheets, saving time and resources. It’s a powerful way to streamline processes and accelerate evaluation.
Challenge #2: Inconsistent or undefined screening criteria
With a steady flow of incoming opportunities to consider, systematic evaluation is essential. To ensure accurate, apples-to-apples comparisons, you need to establish specific criteria for evaluating deals in each sector and lifecycle stage. Equally important is making sure your teams are using that criteria for every deal that comes across their desk. This will help you safeguard the integrity of your firm’s investment strategy.
As deal teams extend across different offices and geographies, maintaining a consistent investment strategy becomes even harder—but also more crucial. While a bigger team can evaluate more deals, without standardized success metrics you’re at risk of wasting even more time on unsuitable opportunities and misaligned priorities.
A unified approach will allow you to allocate resources efficiently, even as your firm grows. Keep your teams focused on the most promising deals and aligned with strategic business goals. Cross-team consistency also makes it easier to give all stakeholders a clear view and understanding of deal priorities and potential, fostering better collaboration and decision-making throughout the investment process.
A well-defined evaluation framework also reduces the likelihood of implicit bias and subjective decision-making. When acting independently, team members may inadvertently allow personal preferences to influence their evaluations. A clear framework helps teams stay objective and make data-driven investment choices.
Additionally, implementing consistent criteria across all evaluations makes it easier to track performance. This makes reporting more reliable and empowers your teams to learn from past decisions and continuously improve the investment strategy.
How technology can help
Ensuring deal screening consistency
A modern deal management platform can streamline initial deal screening by enabling you to configure a screening pipeline with fields for specific investment criteria—for example, location, sector, rentable area, zoning and more.
As you add deals, the system will automatically calculate whether or not they meet your criteria based on extracted data. An overall “fit score” can be calculated to show what percentage of criteria each deal meets, offering a quick and accurate assessment of how well each deal aligns with your investment strategy, before you dedicate time and resources reviewing each deal.
Challenge #3: Fragmented knowledge and gaps in communication
Building your top-of-funnel often involves many team members. But the more people there are involved, the higher the likelihood of something going wrong—from miscommunication to important tasks falling through the cracks. To keep everyone on the same page and working together, prioritize seamless communication.
Effective deal screening calls for more than just standardized metrics. Ensure across-the-board alignment on priorities and responsibilities by facilitating clear and ongoing communication among team members. Keeping everyone on the same page is essential, and it starts with a well-defined, documented process.
Without clear directives, important tasks might end up being neglected—especially once deals move into further analysis. This leads to inefficiencies and potential oversights.
Good communication becomes even more challenging with teams that are spread across multiple locations. Relying on email and other asynchronous communication methods often leads to significant delays. Messages are easily missed or, even worse, misunderstood.
When it comes to the integrity of your investment process, don’t leave anything to chance. Establishing clear communication protocols reduces the risk of miscommunication and helps to ensure that everyone involved in the deal evaluation process is on the same page.
How technology can help
Standardizing workflows
With a centralized deal management platform, you can create workflow templates for every investment type—from relatively simple stabilized assets to complex development projects that require detailed due diligence. Using the same template for comparable deals ensures workflows are consistent and lets you thoroughly track and manage every step of the process, from start to finish.
Reporting on activity
A modern software platform will also provide better insight into evaluation activity across your firm. Rolling up tasks from each deal into a global report gives you a complete picture of all tasks across all active deals. Look for a solution that allows you to further filter reports by assignee, task status, and deal, and generate this report weekly to help keep your entire team aligned on priorities.
Challenge #4: Lack of sufficient comparable data
Access to accurate, up-to-date, and comparable data is crucial for preliminary underwriting, as it powers your team’s ability to quickly assess each deal’s potential and make an informed decision about whether or not it’s a good fit.
Preliminary underwriting relies heavily on a handful of key inputs for quick, back-of-the-napkin analysis, making the quality of your comparable data essential for reliability. Outdated or incorrect comps can distort analyses, leading teams to pursue unviable deals while potentially overlooking other lucrative opportunities.
Robust comps, on the other hand, provide a reliable foundation for swift decision-making, reducing the risk of errors associated with incomplete or inaccurate data.
How technology can help
Automatically create a robust database of market comps
Implementing a robust deal management solution enables you to easily extract key information from broker and seller files. Not only can you add deals to your pipeline without data entry, you can also populate a proprietary database of market data—including sale, lease, and expense comps from offering memorandums, financial statements, rent rolls, leases, and more. Organize all of this information and access it quickly by defining markets based on any property attribute—for example, location, sector, or lifecycle.
Quickly retrieve data for underwriting
With a centralized platform storing all of your deal data, your team always has a wealth of timely, relevant data at their fingertips. By not only extracting information about the deal but also about relevant comparables located in the same document you can automatically store those comps against the deal to substantiate your underwriting assumptions. You can also search your database for additional sale, lease, and unit comps from other relevant deals and then save them alongside the deal for a more comprehensive analysis.
Conclusion
Streamline screening with a platform built for efficiency
To overcome common challenges and make sure your team is able to quickly separate high-quality opportunities from those that lack potential, start by establishing a defined and documented evaluation process for every team member to follow, every time – including steps to take, criteria to assess, and clear directives around communication and other key protocols.
Streamline and accelerate your investment strategy even further by implementing deal management technology that’s designed for today’s fast-paced market. Origin by Altrio has everything you need to amplify efficiency, ensure consistent, accurate deal evaluations, and accelerate informed decision-making about the multitude of opportunities that flow into your firm every day.
Purpose-built by experienced industry leaders, Origin centralizes deal management and expands access to valuable insights—even when teams are spread out across multiple locations. Streamline and automate proven workflows, ensure data is reliable and up-to-date, and protect the integrity of your firm’s investment strategy. That’s the power of Origin.
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