Why SF Investors go silent, and how to handle it

Two weeks ago, we organized a lunch in France with several searchers and some investors. The topic of “ghosting by investors” and the “growing equity gap” came up during the discussion.

For a searcher, investor silence can be one of the most frustrating and ambiguous challenges. After tough months of market screening, sourcing the potential “best deal”, negotiating with the sellers, launching the LOI, conducting DD, and crafting a compelling investment thesis, searchers rely on their investors to fund the acquisition.

Securing their commitment is one of the most critical, and often unpredictable, steps in closing an acquisition. While some investors engage actively throughout the process and are supportive, others may suddenly go silent, leaving searchers perplexed. Is it a sign of disinterest, hesitation, or something else entirely? How big will my equity gap be?

Silence can mean many things: some concerning, some neutral or hesitant, and others simply a matter of timing (e.g., a delay in decision-making and firm commitment). Understanding the underlying reasons behind this silence is crucial for searchers navigating the complex landscape of fundraising and deal execution.

First, it’s important to remind ourselves that, unlike PE firms, SF investors typically participate in multiple deals across multiple countries, syndicating investments through a network of backers. Some will also participate actively in post-acquisition governance. Given this structure, investor engagement can vary widely depending on the deal. Some investors play a more active role and have a hands-on approach, offering mentorship and deal guidance, while others take a more passive approach, following the lead of trusted co-investors (and they may not be experts in the specific niche industry you’re trying to acquire, which means they might want to discuss issues or doubts with other investors). This dynamic makes investor silence a common—and sometimes frustrating—part of the process.

As we mentioned, investor silence can signal many things, some benign, some concerning. Here are the most common reasons:

1/ They are still evaluating the deal and need more time

Investors often complain about the limited financial DD conducted in SF acquisitions, and many of them are now conducting their own evaluations. Therefore, they might be reviewing the financials, risk factors, industry outlook, deal terms, QoE report, customer interviews, legal findings, etc.

They may also be waiting to see if key investors or co-investors commit first, or this could simply be the result of behind-the-scenes discussions with other investors rather than outright rejection.

In these cases, it’s just an indication that they need more time.

2/ They have reservations but don’t want to close the door

If investors hesitate, it could indicate deeper concerns about the attractiveness of the deal: valuation and structure, business fundamentals (concentration, customer churn, margins, recurrency…), growth potential, or the searcher’s ability to execute post-acquisition, etc.

While some investors will voice concerns directly, others prefer to step back quietly. This is why proactive communication is essential to encourage honest feedback.

3/ They are prioritizing other deals

One of the main problems right now in the SF landscape is “time.” Many investors are literally overloaded, as the industry is growing exponentially. They need to simultaneously evaluate multiple deals, back new searchers, manage existing portfolio companies, fundraise themselves, and, most of the time, the team consists of only 2-3 professionals.

Many SF investors look at multiple deals at once. Therefore, if they’ve gone silent, they may be focused on closing another investment, managing capital allocation across their portfolio, prioritizing another country, or waiting for a better opportunity to emerge. Timing plays a significant role in investor engagement, so ask them about their priorities if you suspect they are distracted by other deals.

4/ The “me too” effect: they are waiting for a lead investor to commit

Some investors prefer to follow a lead investor to set terms rather than commit early. If a searcher hasn’t secured a strong lead, other investors may remain on the sidelines. This is especially common when there is an equity gap, there are very few local investors, the deal falls outside typical parameters (industry, size, deal structure), etc.

Silence in this case is not necessarily a “no,” but rather a “wait-and-see” approach: “We’ll move when others move.”

5/ They are disengaged or losing interest but don’t want to say “no” too quickly

If investors have not received consistent updates or if the searcher has struggled to build trust, they may quietly opt out. Signs of disengagement include unanswered emails, delayed responses, noncommittal feedback (e.g., “Looks interesting, let’s talk later”), and lack of involvement in discussions or previous DD. This often happens at the beginning of the search, where investors avoid outright rejection to keep the door open for future opportunities. They might not be fully convinced by this “early” deal but don’t want to discourage the searcher.

How searchers can navigate investor “ghosting”

At the end of the day, fundraising and closing a deal require resilience and adaptability. Here are some suggestions for searchers on how to proactively address investor silence:

• Follow up strategically: Investors are busy, so a well-timed follow-up email or call can reignite conversations. However, avoid excessive follow-ups that may appear desperate. Provide a brief update on deal progress and highlight new developments.
• Seek honest and direct feedback: Instead of assuming the worst, directly ask investors for their concerns. This not only provides clarity but also helps refine future pitches with new investors.
• Diversify your investor base: We always advise searchers, once they’ve finished fundraising for their SFs, to maintain contact with at least a dozen potential investors. It’s crucial to avoid over-reliance on your cap table investors because a deal might not fit all their criteria (size, industry, etc.), making it almost inevitable to have at least a 15-20% equity gap at the end.
• Keep momentum going: Even if some investors go quiet, continue moving forward with engaged investors to maintain deal momentum. Frequent communication and transparency will allow you to leverage warm introductions from investors who are willing to back you on this deal.

Investor silence is unfortunately quite common, and we know how frustrating it can be. However, it’s not always a deal-breaker. It can indicate DD, prioritization, or hesitation rather than outright rejection. Understanding the reasons behind it and responding strategically with proactive communication can increase the chances of closing the deal. The SF journey is as much about persistence and resilience as it is about finding the right deal.