Over the past few years, the software industry has seen a surge in private equity (PE) acquisitions. By some estimates, as many as 70% of software company buyouts involve PE firms – a trend that peaked during the 2020–2021 era of cheap credit and sky-high valuations.
From 2006 to 2025, I’ve worked within or alongside organizations navigating the complex transitions that come with private equity ownership, ranging from founder-led startups to mature software vendors undergoing second or third recapitalizations.
I’ve seen the good, the bad, and the uncertain.
While PE-backed transformations aren’t always negative, they do tend to follow a familiar pattern, and it’s important for customers to know what’s coming before it’s too late to act.
Here’s what a PE acquisition of your key software vendor might mean for you.
Expect turnover (especially in Support & Customer Success)
One of the first things PE firms do is trim operational costs. That can mean layoffs across support, customer success, and mid-level management.
If you’ve built relationships with a trusted CS contact or rely on a responsive support team, don’t be surprised if those faces change or disappear entirely.
Behind the scenes, you’ll likely see major leadership turnover as well, as the PE firm installs new management to execute their growth playbook.
Product development may stall
Founders build products with passion. PE firms buy recurring revenue. While that’s probably an oversimplification, it reflects the reality that innovation often takes a back seat during the first few years post-acquisition.
You might see a short-term investment in the roadmap to plug churn issues or appease key customers, but long-term vision and innovation often slow as the focus shifts to EBITDA optimization and preparing for the next sale in 5–7 years.
Pricing models will likely change
This is the part many customers feel the hardest. Raising prices is the fastest way to hit aggressive revenue targets. You may face:
- Sudden license tier restructures.
- Forced migrations to new plans.
- Short-notice increases (sometimes just 30 days).
If your original contract (MSA) predates the acquisition, it may no longer protect you – and the cost of switching vendors is likely something you didn’t account for with budget planning.
So, what should you do?
If one of your critical software vendors gets acquired by private equity, it’s not necessarily a reason to panic – but it is a signal to act.
Here’s how you can protect your team and your budget:
- Renegotiate proactively - Don’t wait until renewal; initiate conversations with the new ownership now. Focus on pricing protections and support SLAs.
- Build a fallback plan - Assign a team to identify alternatives and run a lightweight PoC, even if it’s just to strengthen your negotiating position.
- Stay plugged in - Monitor user forums and online communities. PE firms often test pricing and policy changes with a small group of customers before rolling them out universally.
At the end of the day, a PE-backed transformation is rarely good news for customers. You can monitor the forums, watch for pricing shifts, and prep your team, but the private equity firm will ultimately do what’s best for their bottom line, not yours.
The good news? At InvGate, we’ve helped countless organizations make the switch with minimal disruption and maximum clarity, giving you a turnkey migration path before the turbulence begins.
