The Dry Powder Report

What this report finds

Private equity is sitting on the largest stockpile of uninvested capital in its history, roughly $3.7 trillion, and that capital has to be deployed. For a founder selling a technology company, this wall of money is the single biggest force in the buyer market, but its effect on a founder’s leverage is more nuanced than the headline suggests.

Dry powder is committed capital that has been raised but not yet invested. Its sheer scale, near a record $3.7 trillion, makes it the dominant force in the buyer market, and its structure explains why it must be put to work.

Dry powder is not just large; it is getting old, and old capital is the most motivated capital of all. The aging of the overhang turns latent demand into urgent demand, and that urgency is a source of leverage for sellers.

The deployment pressure is only half the story. The same sponsors holding capital they must invest are holding a vast backlog of companies they must sell, and that backlog shapes the market as much as the dry powder does.

The defining condition of the current private equity market is that sponsors are pressed from both directions at once. They must deploy a record overhang before it ages out, and they must exit a record backlog before their holdings age further. This two-sided squeeze, not the dry powder alone, is what a founder is selling into.

Caught between capital to deploy and companies to exit, sponsors have turned to a set of structures that manufacture liquidity without relying on traditional sales. These release valves are reshaping the market a founder sells into, and they matter to how the squeeze resolves.

Windsor Drake’s research desk compiled this report from transaction data, public filings, and the firm’s sell-side advisory work in software, fintech, AI, and cybersecurity. It is intended to inform founders, owners, and acquirers evaluating a transaction, and does not constitute investment advice.