Regulatory clearance is the most common cause of closing delay in mid-market deals, and the thresholds catch more deals than founders expect. Foreign investment regimes now reach even small tech deals.
The approvals you didn’t think you needed
HSR: Hart-Scott-Rodino notification can be required once the transaction value exceeds $133.9 million, the 2026 threshold in effect since February 17, 2026 and adjusted every year. There’s a 30-day waiting period, and a second request can add months.
CFIUS: Review is mandatory for certain critical technology, critical infrastructure and sensitive data deals, and voluntary otherwise. The surprise is that any foreign investor on your cap table, not just the buyer, can bring a deal into CFIUS scope. FIRRMA pushed CFIUS’s reach down-market, and tech deals of any size can qualify.
Foreign regimes: The UK’s National Security and Investment Act, EU foreign direct investment screening, Australia’s FIRB, the Investment Canada Act and India’s Press Note 3 are all increasingly aggressive on tech, dual-use and data. A U.S. target with a UK or EU buyer can trigger home-country review on top of CFIUS.
Export controls and sanctions: ITAR and EAR classifications and sanctioned-jurisdiction exposure are diligence findings before the LOI and clearance obstacles before closing.
State and sector regulators: State insurance commissioners, the FCC for telecom, banking regulators and DCSA for defense. State insurance and DCSA security clearance reviews are the most common surprises in tech-adjacent deals.
Map every regulatory approval at the LOI. The ones discovered at signing add 60 to 180 days, and during that wait the buyer holds the leverage.
Who pays for the wait
Once a deal needs antitrust or foreign investment clearance, the timeline is no longer in either party’s hands. How you allocate the risk of delay, and of outright failure, is one of the most quietly leveraged negotiations in the documents.
The outside date: The drop-dead date by which closing must happen, or either party can walk. It’s typically 6 to 12 months from signing.
Ticking fees: An escalator on the purchase price for delays past a target closing date, usually per day or per month. They’re common in private equity deals to compensate the seller for the time value of money during regulatory review.
Efforts standards: A ladder of buyer obligation. From lowest to highest: commercially reasonable efforts, reasonable best efforts, best efforts and hell-or-high-water. Each rung demands more from the buyer to overcome regulatory objections.
Hell-or-high-water: The strongest version. The buyer must take any action, including selling assets, to win approval. Sellers want it, buyers resist it fiercely, and it’s the most fought-over clause in any deal with antitrust risk.
Reverse termination fees: Paid when the buyer walks because of financing failure or regulatory denial. 14% of 2025 deals included one, with a median size of 8.2% of transaction value, up from 4.1% in 2024. The price of regulatory failure has been climbing.
Specific performance: Can you force the buyer to close? Half of 2025 deals with termination fees let the seller seek both the fee and specific performance, though only one can be awarded. A fee-only remedy effectively gives the buyer an option to walk; specific performance forces the close.
Where to spend your time
The architecture of the wait is worth more than the headline price-adjustment provisions. If your deal carries regulatory risk, spend real negotiating time here.
Ahmed Hasan is the founder and CEO of Venture Bridge Law, a corporate and M&A boutique. This article is general information, not legal advice.