Software companies lacking proprietary data and control over workflows may not have a 'right to exist' in the AI era.
Institutional investors are concerned that a large influx of capital from the private wealth channel could inflate purchase prices and dilute returns.
Opportunities Identified
The 2022 market reset has created a 'great vintage' for deploying capital into enterprise software at attractive valuations.
Generative AI can drive significant operational efficiencies, pushing software companies beyond the 'Rule of 40' to new profitability benchmarks ('Rule of 50, 60, 70').
The development of 'agentifying software' represents a new frontier for value creation and revenue generation.
Tapping the private wealth channel provides additional capital to pursue large deals without partnering with other private equity firms.