"Out of respect for our other investor prospects, we are not divulging the names of the other investors we are speaking with. We do not want them to feel like we are using their name to curry in other investors into the round. We also want each investor to make an independent assessment of whether they are interested in us -- not because of who else is investing. We will of course disclose who the other investors are before any final commitments, but we'd ask that you make your own independent assessment."
The goal is to get everyone to put forth term sheets independently -- and at the same time. Typically, when a fund issues a term sheet, they will give you a very short fuse to make a decision (often less than a week). You want everyone to come in at the same time so you can objectively assess your options and decide what is the best outcome for you. This is also why it makes sense to go all-in when fundraising. Even if you get an opportunistic who's interested in investing -- unless it's a no-brainer deal (e.g. an uncapped note), you may not have a good sense of what is fair / market, unless you have other offers to compare it to.