Why “Plenty of White Space” Is a Weak Growth Argument

Category: Growth Strategy
Read Time: ~5 minutes

“Plenty of white space” is one of the most commonly cited growth arguments in lower-middle-market deals.

It appears in CIMs, management presentations, and investment memos as a reassuring phrase — a way of saying the opportunity is large and underexploited.

In practice, it often signals the opposite: that growth has not been clearly understood.

White Space Describes Absence, Not Opportunity

White space simply means something hasn’t happened yet.

It does not explain why it hasn’t happened, what would need to change, or who is capable of executing it. Treating absence as opportunity skips the hardest part of underwriting: causality.

A market can be large, fragmented, and underpenetrated — and still be difficult to grow into profitably.

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The Question Buyers Rarely Ask

Instead of asking how much white space exists, stronger investors ask a more uncomfortable question:

Why hasn’t the business already captured it?

The answer is rarely “because no one thought of it.” More often, it involves constraints that are inconvenient to highlight: limited sales capability, pricing pressure, customer acquisition friction, operational bottlenecks, or management bandwidth.

White space exists for a reason.

 Where the Argument Breaks Down

White space arguments tend to break down when growth depends on new behavior, not extension of existing behavior.

Expanding into new geographies, customer segments, or service lines often requires different skills, incentives, and systems than the core business currently possesses. The assumption that success in one context automatically translates to another is usually unfounded.

Growth is not additive by default.
It is conditional.

The Hidden Cost of Pursuing White Space

Pursuing ill-defined growth can be more dangerous than standing still.

It diverts management attention, introduces complexity, and increases execution risk — often before the core business is fully stabilized. When growth initiatives fail, they rarely fail cleanly. They leave behind partial investments, frustrated teams, and diluted focus.

None of this shows up in a growth slide.

A Better Way to Underwrite Growth

Strong growth underwriting starts narrow, not broad.

It focuses on:

• What the business already does well

• Where customers already say yes

• Which capabilities already exist internally

Growth that compounds existing strengths is far more reliable than growth that requires reinvention.

White space may still exist — but it is treated as optional upside, not required success.

Practical Takeaway

When a deal relies heavily on “plenty of white space,” pause.

Ask what has prevented that growth historically, what must change to unlock it, and who will be responsible for executing the change. If those answers are vague, the growth thesis likely is too.

Opportunity without explanation is not a strategy.

Closing Thought

White space is easy to draw on a slide.

Turning it into profitable growth requires clarity, capability, and discipline — not just ambition.

The absence of growth is not proof that growth is easy.
Often, it is evidence that it is hard.