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Imagine a deal team is looking to invest in the identity access management & compliance automation space. The team carefully constructs a market map with a total of 600 companies. Each one fits the industry, size range, and ownership structure. So, where does the team go from here?
No sourcing team can work 600 companies with the same intensity. They have to whittle their market map down to an actionable target list, prioritizing the companies that warrant attention right now.
In this article, we break down the steps to building better private market target lists and how to execute on them.
Evaluate How Strongly the Company Aligns with the Thesis
For the first round of refinement, deal teams should assess which companies best match the investment thesis.
Evaluate each target for:
For buy-and-build strategies, a company's rank depends partly on the role it would play after acquisition. A company could be a strong fit for an add-on but a poor fit as a platform, or vice versa.
Platform assessment weighs management infrastructure, geographic footprint, existing operating systems, and the company's ability to absorb future acquisitions. Add-on assessment weighs local density, customer overlap, and how cleanly the business would fold into an existing portfolio company.
A smaller regional operator might have limited platform potential on its own, but its geographic fit could make it a top-tier add-on. It all depends on what the acquiring firm is trying to achieve.
Two equally appealing targets can present very different opportunities depending on the strength of their relationships with the acquiring firm.
The relevant relationships rarely sit only with the sourcing team. Operating executives, portfolio company leadership, advisors, and former colleagues often hold paths beyond the BD team.
Historical outreach matters, too. Consider:
Deal teams need to weigh each connection’s quality, recency, and relevance.
For example, let’s say Company A has a stronger strategic fit, but the acquiring firm has no relationship with it at all. Company B ranks slightly lower on fit, but the firm's portfolio company CEO worked alongside the target’s founder for ten years. The deal team could reasonably engage with Company B first while it builds a path into Company A.
Remember: relationship strength should determine a target’s rank among companies that already fit the thesis well. It should never turn a weak-fit company into a high-priority target just because the access happens to be easy.
Even if a target fits the investment thesis, and even if the acquiring firm has a strong relationship with its decisionmakers, that matters little if the target isn’t actually ready to transact.
Founders don’t just wake up one morning and decide to sell. Intent builds gradually, through a series of decisions that often look unremarkable in isolation. A founder brings in a CFO to professionalize the financials. They bring in outside advisors for a strategic review. Reporting cadences shift from casual to formal. Succession conversations start within the family or the leadership team. Capital planning takes on a longer horizon than usual.
These signals have always existed ahead of every transaction — the market just had no reliable way to observe them in time to act. Grata’s Seller Intent is changing this. Not only is early deal intelligence more visible, it’s also more actionable.
Deal teams can now prioritize their target list based on which companies have the highest Seller Intent scores. That way, team members can focus their energy on the targets that are showing real, measurable signals of exit readiness. The rest can be flagged for continued monitoring. If and when their scores change, they can move higher up the list.
Next, use each target’s strategic fit, relationship strength, and transaction timing to determine its tier. Once you know the tier, you can assign the next step.
Private market deal teams should not make the mistake of viewing target lists as static. Ownership changes. Companies acquire competitors. Revenue increases. Relationships develop. Intent to sell ebbs and flows. Each change can shift a target’s priority.
Teams have to consistently maintain the underlying market rather than periodically rebuilding lists from scratch. Update company information as it changes, add new intelligence from conversations, track relationship development, and monitor signals that affect transaction timing.
Grata’s private market intelligence platform provides all of the data and purpose-built workflows that dealmakers need to keep their lists and relationships current. Deal teams can leverage Grata’s company data to define and enrich their market, add ownership and financial context, connect relationship information, and identify companies showing signs that they are preparing to sell.
Schedule a demo today to get started with Grata.
An acquisition target list is the prioritized subset of companies a deal team pulls from a broader market map to research, monitor, build relationships with, or actively pursue.
Rank qualified companies across three dimensions: strategic fit, relationship strength, and transaction timing. Fit determines how much the firm wants the company. Relationships determine how well it can reach the company. Timing determines whether now is the right moment to act.
A market map is the complete, verified universe of companies that fit an investment thesis. A target list is the prioritized subset of that universe a team actively works, ranking companies by relative attractiveness and readiness.
Initial screening criteria already established market-map eligibility. Ranking should compare qualified companies on strategic attractiveness, fit for the intended transaction role, relationship access, and transaction timing.
A strong relationship can move a company up the priority list among companies that already fit the thesis well, since it improves both access and win probability. It shouldn't override weak strategic fit on its own.
Seller Intent adds a timing signal that a static market map can't capture. It helps a team identify which already-attractive companies may be worth engaging now rather than in a future cycle.
A working target list should update whenever meaningful company, relationship, or intent information changes.
Monthly tactics from Grata’s team and operators.
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