Private Equity

Dry Powder

Uncommitted capital that a PE firm has raised from LPs but has not yet invested.

Definition

Dry powder sits in fund accounts waiting to be deployed into new platforms and bolt-ons. The industry currently holds record levels of dry powder, meaning PE firms are actively hunting for AI-enabled targets and AI-ready operating models. Capital pressure to deploy is a tailwind for any advisor positioned at the intersection of AI and value creation.

Why it matters

High dry powder creates demand for AI Diligence support as firms screen more targets and need a credible view of each one's AI readiness before bidding.

Where Sophizo applies this

Sophizo deploys Dry Powder inside revenue and AI engagements with growth-stage operators and PE-backed portfolios.

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Related terms in Private Equity

EBITDA
Earnings Before Interest, Taxes, Depreciation, and Amortization. The core profitability metric private equity uses to value companies.
IRR
Internal Rate of Return. The annualized return a PE fund generates on the capital it puts to work.
TVPI
Total Value to Paid-In. The total value a fund has created, realized plus unrealized, divided by the capital LPs have contributed.
DPI
Distributions to Paid-In. Cash actually returned to limited partners, divided by the capital they contributed.
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