Notes on the
lower middle market.
Dated notes from the Praxus Capital desk on private markets, technology deal-making, and market structure.
A data-center order book is also a credit exposure
This month's IMF warning on AI borrowing and the selloff in technology shares put the financing behind data centers in view. Suppliers should show buyers and lenders who funds each project and when the cash arrives.
Published October 16, 2026 · 3 min read
Lenders now ask the AI question too
Private-credit lenders have grown pickier about software just as a record volume of their loans nears maturity. Owners refinancing or selling should bring lenders the AI evidence that buyers already ask for.
Published October 17, 2026 · 3 min read
Who keeps the tariff refund
More than three quarters of the tariffs the Supreme Court struck down in February have been refunded to the companies that imported the goods. In a sale, the purchase agreement decides whether the seller or the buyer keeps that money, and customers may claim a share.
Published October 17, 2026 · 3 min read
Interest paid in kind is paid at closing
Rates rose in September for the first time since July 2023, and more private-credit borrowers are adding interest to their loans instead of paying it. When the company is sold, that interest comes out of the owner's proceeds.
Published October 17, 2026 · 3 min read
Outside AI, the last round is not a floor
Venture investors put most of this year's money into AI, and the listings window has favored a few very large issuers. Other technology companies raising or selling this autumn should start from current evidence.
Published October 16, 2026 · 3 min read
Seat counts explain less of software revenue
Three in four software companies in a spring survey had changed pricing or packaging, and AI agents now do some of the work that seats used to measure. A seller should show buyers how its revenue is earned today.
Published October 16, 2026 · 3 min read
Cheaper credit still needs a cash cushion
August borrowing costs improved, but weaker sales make the autumn cash requirement a separate decision from the price of debt.
Published September 14, 2026 · 3 min read
Price a contractor’s backlog job by job
September construction releases show rising input costs and nonresidential spending growth concentrated in data centers. Acquisition terms should follow the unfinished jobs, not the sector headline.
Published September 14, 2026 · 3 min read
How buyers underwrite AI exposure now
Acquirers have stopped paying for the word and started testing the substance. In technology processes, AI claims are now diligenced like revenue quality. Sellers should prepare for that scrutiny before launch, not during it.
Praxus Research · 3 min read
When the strategic comes to the table
Corporate acquirers are the largest buyers in the market and the most selective. In 2025 they drove software M&A and paid the widest premium in a decade. By mid-2026 they had pulled back from sponsor-owned assets. A credible strategic bid changes the design of a process, and the process has to be designed for it.
Praxus Research · 3 min read
The cost of waiting for a better market
Timing a raise or a sale to the rate cycle is a trade most private companies lose. The window that matters is company-specific, set by momentum, runway, and buyer attention. It rarely lines up with the macro one.
Praxus Research · 3 min read
Secondaries move to the center
What began as a release valve for institutional portfolios has become ordinary market plumbing. Sponsors, LPs, and founders alike now treat the secondary market as a first-class source of liquidity, and structure for it from the start.
Praxus Research · 2 min read
Durable revenue beats headline growth
In software processes this year, buyers are paying for retention, pricing power, and mission-critical workflows over raw growth rates. The diligence bar moved; positioning has to move with it.
Praxus Research · 3 min read
Process quality is the multiple
In a market where buyers hold the clock, outcomes are decided before launch, in the data room, the model, and the narrative. Preparation is not a formality. It is the spread between a fair price and a full one.
Praxus Research · 2 min read
Private credit and the founder's balance sheet
Non-bank lenders now set the terms of leverage in the lower middle market. Speed and flexibility come with covenants and cost. Founders should understand both sides of that trade before the term sheet arrives.
Praxus Research · 2 min read
The exit market has changed shape
The straight line from build to IPO or outright sale has bent into a set of paths. Continuation vehicles, minority recaps, and structured partials are all normal outcomes now. Choosing among them early is part of building the company itself.
Praxus Research · 3 min read
A lower spread is not a larger acquisition budget
The public first-quarter deal data pointed to better financing for some platforms. Owners still needed borrower-specific terms before increasing an acquisition budget.
Published September 14, 2026 · 3 min read
April's margin question: which costs belong in earnings?
April releases made the timing of supplier costs and customer repricing a useful starting point for industrial earnings diligence.
Published September 14, 2026 · 3 min read
A February court ruling was not a closing timetable
HSR thresholds rose while the filing form was under challenge. Owners needed separate answers on reportability, filing readiness and permission to close.
Published September 14, 2026 · 3 min read
Lower policy rates did not settle the credit question
November's evidence separated borrowing cost from a bank's willingness to lend. Owners needed to test usable cash, not just quote rates.
Published September 14, 2026 · 3 min read
