The average IC memo typically runs 30 to 60 pages. Producing it is one of the most underestimated costs in the deal process.

Last month we looked at diligence, where AI leverage shows up first. The next question is what happens after, when it’s time for IC prep. That gap between the depth of analysis required and the infrastructure most firms have to produce it is one of the most expensive inefficiencies in private capital. It burns deal teams, misaligns partners, and slows decisions at exactly the moment speed matters most.

The Gap in Every Deal

Most AI tools are built for the top of the funnel: sourcing, screening, initial market research - IC prep is where AI adoption can stall.

PwC's benchmark testing found that manual IC memo synthesis takes around 15 hours per deal. AI implementation compresses that to four hours. The gap isn't marginal; it's 11 hours per memo that either compound or disappear.

The benefits are there for firms that have embedded AI into the right workflows. McKinsey's 2026 Global Private Markets Report found some GPs reporting productivity gains of 30–40% in analyst-intensive tasks and noted that leading firms are now reflecting AI directly in their IC materials, while most are still limited to lighthouse use cases.

Bain's 2026 Global PE Report argues that returns must now come from operational performance, not leverage or multiple expansion - deals now require 10-12% annual EBITDA growth to generate a 2.5x return, versus 5% a decade ago.

The bar for IC has moved with it since the room now expects a pre-vetted value creation plan, not just a diligence pack. The cost of walking in underprepared has never been higher.

What's Actually Being Lost

When IC prep runs long, the costs compound: teams lose capacity for the next deal, partners who aren't aligned extend or reconvene the meeting, and context from prior diligence goes unsurfaced, meaning the same analyses get repeated.

In our conversations with funds, they say the work usually exists somewhere. An analyst flagged customer concentration risk on a comparable deal 18 months ago. A sector note from a previous process maps directly onto the target's market dynamics. A prior IC memo wrestled with the same question about management team depth. Under time pressure, across fragmented systems, none of it surfaces.

The result: analyses get repeated. Questions get asked twice. Deal history insights don't make it into the room.

IC prep isn't just a speed problem. It's a context problem.

This is what we built Capsa's IC workflows around. Not faster memo formatting, but the harder problem: making sure the context your firm has already built actually makes it into the memo and into the room.

That means generating pre-IC materials - company overview, market analysis, investment considerations - in a fraction of the time it takes manually. It means checking memo consistency against best practice frameworks before the document reaches the committee. And it means real-time search across your firm's connected stack, so the sector note from last year and the comparable deal your team diligenced a long time ago are findable in minutes, not buried.

The firms walking into IC with the fullest context aren't working harder. They have better infrastructure.

One Thing to Do This Week

Before your next IC, note how many hours go to finding and reformatting work that already exists. That's the number worth fixing.

Don't miss future insights. Subscribe to the Deal Intelligence Brief here.