A Twist on is SW Dead: Software Asset Valuation Expectations

There have been a ton of threads recently on the state of software PE. While discussions have been great on AI risks and the future of software, I think a lot of us would benefit from a cleaner viewpoint on “What will software deal flow look like in 2026?”

Huge question with big implications for the bankers and investors alike. Rather than rehash our views on AI on this thread, I’d like to propose a different way to get at the question.

IMHO, the best way for us to do this is to leverage both groups unique vantage points. What are those?

Bankers: you have access to a wider set of seller valuation expectations.

Investors: you know roughly what your IC would pay.

It might be useful to try this approach:

Bankers: On an obviously unnamed and rounded/banded basis, please provide these datapoints below for business you’re pitching.

Investors: Say if your IC would entertain that price or if it’s so far off you expect a failed process.

• LTM Revenue / EBITDA / Margin:
• L3Y Revenue CAGR:
• N3Y Revenue CAGR:
• Software endmarket / vague description:
• Level of AI risks: Low/Med/High:

• Seller Valuation Expectations: X.X [Metric]

  Hope this results in a thoughtful discussion rather than “we all f***ked.” I think we already know the answer to that. This is about seeing if any of us will be added new bullets to our résumé’s before we find something else to do.