Most matters presented to litigation funders are declined, and the reasons are rarely dramatic. The most common is simply size: many funders will not underwrite a matter below roughly $1-5 million in expected net recovery to the claimant, because fixed diligence costs make smaller cases uneconomical regardless of merit.
The second most common reason is an unclear or unquantified damages theory. A case can have obvious liability and still be unfundable if no credible expert has yet modeled what the recovery is actually likely to be. Third is collectability, even airtight claims against insolvent or hard-to-locate defendants are routinely declined. Fourth is counsel: funders are underwriting the litigation team as much as the case, and inexperienced or overextended counsel is a common reason for a pass.
Finally, timeline and jurisdiction matter: claims expected to take many years to resolve, or filed in jurisdictions seen as unpredictable or hostile to enforcement, face a materially higher bar. None of these are permanent disqualifiers, a case declined today, with a completed damages model or newly engaged experienced counsel, is often fundable a year later.