Is there lack of capital in ETA?

searcher profile

February 11, 2026

by a searcher from University of Florida in Orlando, FL, USA

I recently heard on a podcast that one investor group is reviewing more than one deal per day. From an LP’s perspective, that level of deal flow is nice. It allows them to be highly selective and focus only on the highest-quality opportunities. But for searchers and independent sponsors on the other side of the table, it’s tough. It makes you wonder how many solid deals simply never make it to closing because capital is constrained or investors are overwhelmed with options. As someone preparing to raise equity for a deal, the current environment feels increasingly competitive — and, candidly, a bit discouraging. Is there a lack of capital in ETA?
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Reply by an investor
from Wesleyan University in Dedham, MA, USA
There has never been more capital in ETA worldwide, billions literally. One could make the argument that there is too much capital in ETA at this point as returns are very much under pressure and deals are getting done that probably shouldn’t be. And worst of all IMO is that there are many getting into search who aren’t serious about and have an arrogance that would have been unheard of 10 or 20 years ago. It used to be that it was as really really hard to get into search so only the very best got funded. I am all for growth and opening the category to all who are interested in trying their hand at it, but remember, like anything important, this shit is hard.
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Reply by an investor
from Dartmouth College in 80 S Main St, Hanover, NH 03755, USA
The increase in deal flow in the segment doesn't imply at all that "solid deals" struggle to get financed. The lack of barriers to ETA and independent sponsorship has brought a vast dispersion of quality of sponsors and deals to the market. The "on the surface" solid deals and sponsors tend to get funded and increasingly with competitive tension favoring the sponsor/searcher. The market for funding is becoming more efficient - which doesn't imply everything should get funded. Weird deals, or deals that require a lot of squinting to get conviction, or that you have to have some very specific beliefs, or where there is some obvious blemish in the caliber of sponsor/searcher - they may struggle - but there is more liquidity than ever for edge cases as well. Lots of reasons to be discouraged and reflective about jumping into this market, but capital availability isn't imo one of them.
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