The VC industry boomed in 2025, but it became very selective. Money was flowing again, but only to a small part of the market.
And while most headlines spoke of rebounds and record rounds, many founders still could not raise.
That tension defines the outlook for 2026. Venture capital was frozen post-2021, but now it is filtered.
What follows is a different market with new rules on who gets funded, who exits and who gets ignored. Understanding 2026 means understanding how power has shifted inside the enterprise itself.
2025 looked strong until you looked closer
On the surface, 2025 looked like a comeback year. Global venture funding rose sharply after two weak years.
In the US total deal value reached roughly $250bn through the third quarter, according to PitchBook. That put the year on track to be one of the strongest of the past decade.
The detail tells a different story. Nearly 40% of that capital went into just ten deals.
Four transactions alone accounted for more than $75bn. Globally, AI captured close to 50% of all funding in 2025. The rest of the market did not feel a recovery.
Source: Crunchbase
In the US, the share was closer to two-thirds by value. Outside AI deal activity remained steady, but capital sizes stayed small. Valuations moved slowly. Many companies rose only because insiders stepped in.
AI is no longer a sector, but the price of entry
In earlier cycles, new technologies created waves of startups, but AI has created a gate.
In 2025, companies without an AI story found it harder to raise, even if their core business was healthy.
Investors now expect faster revenue growth earlier. They expect leaner teams.
They expect software margins in places that never had them before. AI made these expectations feel reasonable. In practice, they raised the bar across the board.
The result is a quality gap that will widen in 2026. At seed and Series A, capital is still available.
PitchBook data shows first-time financings in 2025 almost matched the pace of 2021. Many of those were AI-driven.
AI startups raised faster and moved between rounds more quickly than non-AI peers.
Source: PitchBook
The break happens later. Series B has become a cliff. Companies that show rapid revenue expansion and clear distribution scale raise very large rounds.
Others stall. In 2026, this divide becomes sharper as investors protect follow-on capital for fewer names.
AI also changes how exits are priced. Founders and boards now plan for long private lives supported by large growth rounds and secondary liquidity. Going public is no longer the default next step, rather one option among several.
Liquidity is back, but only through narrow doors
Liquidity improved in 2025 but it did not spread evenly. IPOs returned, but at lower prices.
Two-thirds of unicorns that went public did so below their last private valuation according to PitchBook. The stigma faded. The math did not.
This pattern will continue in 2026. The IPO market is open but selective.
Estimates suggest between 50 and 70 US venture-backed IPOs next year, depending on market conditions. That is an improvement on 2024 but far from a flood.
But it’s more about the sector instead of timing.
In 2025, nearly all IPOs came from AI crypto, fintech defense and space. Healthcare and consumer tech were largely absent.
That bias is likely to hold as long as policy support and public market narratives stay aligned.
Source: Wellington
Talks of another liquidity avenue have started gaining steam in 2025. Secondaries moved from a backroom solution to a core feature of venture liquidity.
Secondary volumes passed $200 billion globally this past year. Large banks bought secondary platforms. Companies ran more structured tender offers. Employees sold earlier. Early investors rotated out.
In 2026, this market grows, but access tightens.
Leading startups increasingly control who can trade their shares. Information rights become scarce. Price discovery becomes uneven.
Liquidity exists but only for those with relationships, scale and patience.
Big funds now shape the entire market
Perhaps the most under-discussed change is who controls venture capital.
Large multistage funds now dominate every stage. They lead seed rounds. They reserve massive follow-on pools. They set pricing norms.
PitchBook data shows funds larger than $500m now control more than half of all dry powder while representing a small fraction of total fund count.
This has consequences. Seed rounds are larger. Ownership stakes are smaller. Speed matters more than persuasion.
Source: PitchBook
For founders, this creates clarity and risk. Backing from a large platform brings security and follow-on support.
It also brings pressure to grow into that capital quickly. In 2026, many early-stage companies will look well-funded and still fragile.
For smaller funds, the environment remains hard. Fundraising bottomed out in 202,5 but recovery will be slow. Even optimistic scenarios put 2026 fundraising well below the peaks of 2021. Capital will continue to concentrate around established names.
Geography follows the same logic.
Deal activity has reconverged around the Bay Area and New York, where capital moves fastest, and decisions happen in person. Remote investing expanded access during the pandemic. Speed has reversed it.
The mega unicorns everyone is watching
A small group of private companies now sit at valuations once reserved for public markets. SpaceX leads with talks of a valuation in the range of trillions already.
OpenAI is aiming for a $500bn IPO, followed by ByteDance and Anthropic at roughly $480 bn and $230bn, respectively, showing how AI has absorbed an outsized share of global venture capital.
Other giants include Databricks and Stripe, each with the scale and liquidity to remain private for years.
The common thread is choice. With deep private capital and active secondary markets, the pressure to go public has eased, turning IPOs into a strategic decision rather than a necessity.
Source: Yahoo Finance
2026 will reward focus and punish drift
By late 2026, venture capital will appear healthier in aggregate. More capital will be deployed. More companies will rise. Fewer outcomes will drive returns.
The industry is entering a phase where concentration defines success. Scale arrives earlier. Benchmarks rise faster. Tolerance for ambiguity shrinks.
The risk for investors lies in mistaking volume for breadth. The opportunity lies in understanding where capital is willing to wait and where it is no longer patient.
Although venture capital still funds risk, it now demands proof much sooner.
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