Each year, we ask a diverse group of top investors for their insights on what the upcoming year might hold. Last year, while some expected the IPO market to bounce back, others anticipated the momentum behind AI to pick up—and they were right. This year, TechCrunch reached out to five investors from different sectors to find out what they’re gearing up for in 2026.
Here’s what they had to say.
What will it take for a founder to raise next year, compared to last year?
James Norman, Managing Partner, Black Ops VC
Raising funds in 2025 will require founders to transition from being “visionary” to “battle-tested.” In past years, access to capital was a major advantage; however, investors are now cautious about “pilot purgatory,” where enterprises test AI solutions without a compelling buying need. By 2026, expectations will be higher. Founders need to demonstrate they offer more than just traction; they need a clear distribution advantage. Investors are looking into sustainable sales strategies, proprietary workflows, and deep expertise that can withstand the “capital arms race.” VCs aren’t interested in flashy demos; they want to back founders building sustainable, trustworthy, and scalable ventures.
Morgan Blumberg, Principal, M13
We believe that the best founders will always have funding options, but the criteria will be stricter. At early stages, especially in AI application software, I anticipate fewer mega seed rounds due to intense competition and capital already spread across various categories. Founders must differentiate themselves through unique distribution strategies or insights rather than relying solely on a big market opportunity or strong resumes. Capital has consolidated around crowded sectors. At Series A and B stages, top-tier rounds will need to show clear evidence of rapid momentum, as the market has adapted to these new demands and is focusing more on revenue sustainability.
Allen Taylor, Managing Partner, Endeavor Catalyst
We’re prioritizing investments that align with three key criteria: a larger total addressable market, faster growth, and improved unit economics. Last year, we made 50 investments across 25 countries, and we expect even more this year. The most successful founders don’t just present what they’ve accomplished so far; they also articulate where their business is headed next. Genuine revenue and a loyal customer base still matter, but they’re no longer enough. I always ask: Where is this company today, and where is it realistically headed in the next 12, 18, or 24 months? The founders who secure funding will be those who can answer that convincingly.
Dorothy Chang, Partner, Flybridge Capital
Many founders find it easier to develop new products today because advanced generative AI coding tools are widely available. However, these tools are leveling the playing field, and competition is more intense. Founders aiming for venture-scale opportunities need to ensure they are (1) addressing significant problems rather than just easy coding projects; (2) operating in a niche where they have a unique advantage; and (3) offering something proprietary that can’t be easily duplicated. This might involve a unique perspective, exclusive data access, or deep industry connections. While these ideas aren’t new, the stakes and expectations have never been higher.
Shamillah Bankiya, Partner, Dawn Capital
For founders targeting enterprises, awareness of the value AI can provide has significantly increased. Demonstrating a clear path to ROI will be pivotal for investors. Founders who can prove their products deliver substantial value will have the best chances of securing funding.
What areas are you looking to invest in and why?
Norman
As a fund, we remain industry-agnostic but continuously sharpen our focus. Currently, we’re looking for “high-context founders”—those with extensive experience in complex industries who can leverage AI for profound impact. The ideal investment for us combines deep subject expertise with a strong distribution channel, meaning the founders know not only what to build, but also who will want to buy it.
Blumberg
We’re particularly interested in under-the-radar or traditional sectors outside the typical tech founder’s radar, where AI can create significant ROI that encourages adoption. These markets offer lower competition and inherent complexity. We’re also optimistic about 2026 being a promising year for foundational model development and frontier research, particularly in healthcare, focusing on comprehensive solutions rather than isolated apps.
Taylor
Beyond the U.S.! The best risk-adjusted returns are no longer limited to Silicon Valley. Regions like Poland, Turkey, and Greece are emerging as hot spots. When investing across 25 countries in a year, you learn that venture doesn’t only occur somewhere and then expand outward. As of 2018, more than half of venture dollars and unicorns now reside outside the U.S. We see founders in Latin America, Africa, the Middle East, and South Asia building scalable ventures from the outset.
Chang
I’m particularly drawn to founders addressing significant societal challenges and leveraging technology for meaningful progress. I find the numerous startups focused solely on automating specific workflows uninteresting. I’d rather see larger platform shifts defining this technological era.
Bankiya
AI has greatly impacted software, and the next frontier lies at the intersection of software and hardware. A significant portion of the world’s GDP is tied to physical industries, and software-only solutions can’t unlock our full growth potential.
Do you think the IPO market will thaw? Why or why not?
Norman
Yes, the IPO market is likely to thaw, not because conditions are suddenly perfect, but because alternatives are running low. We’re reaching a tipping point where the private market’s ability to maintain unsustainable multibillion-dollar valuations is dwindling. Companies, boards, and late-stage investors need a way to reset expectations and establish real liquidity.
Private credit has temporarily extended runways, but it can’t address structural capital needs. Eventually, fresh capital is essential, and public markets remain the only scalable solution. Their growth narratives and strategic importance can provide the necessary momentum to reopen the IPO window.
Blumberg
I believe we will see the IPO markets reawaken, fueled by a backlog of companies looking to list. Anticipated tech IPOs include high-profile names like Anthropic and OpenAI, and a mega IPO may create a ripple effect for others.
Taylor
Absolutely—2026 will be a landmark year for IPOs in New York as many top firms will decide it’s time to list. Additionally, we’ll likely see significant tech IPOs from unexpected places, such as the Saudi stock market.
Investors may underestimate the global nature of this thaw. We’ve endured nearly four years of muted IPO activity, resulting in a backlog of top-tier companies ready to go public. When the window opens, it won’t just be U.S. companies stepping forward. We’re already seeing major U.S.-listed firms from Latin America, with more poised to follow.
Chang
We’re aiming for fewer, but higher-conviction investments. There’s a lot of startup activity, and when we meet exceptional founders, we want to back them with larger investments and ownership stakes.
Bankiya
A significant catalyst will be necessary to reestablish the IPO markets, such as massive AI players facing steep cost increases or sharp revenue drops, like a sudden spike in energy prices that makes AI operations unsustainable.
How are you looking at the venture market for next year as a fund manager?
Norman
We’re entering a critical phase for the venture market that will distinguish lasting companies from fleeting ones. The fallout will impact Fund I managers who haven’t established a solid foundation and active Fund II managers contending with distribution droughts from 2021. Institutional investors, particularly university endowments, are in recovery mode. Having been squeezed by reduced liquidity in 2021 and 2022, many are now utilizing secondaries and adjusting their pacing to maintain commitments.
This translates to fewer new relationships and less tolerance for emerging managers. Family offices are stepping in, shifting from passive contributors to active players. They are not only compensating for the retreating institutions but are also scouting direct mandates to find unique strategies.
In 2026, there’s no middle ground. You need a solid track record or unique access to outstanding deal flow. A vague generalist approach and mediocre performance won’t cut it this cycle.
Blumberg
We believe we’re in the early stages of AI transformation, so next year should be a strong vintage. Capital will continue to concentrate on a small number of winners, so we focus on being selective and supporting our companies operationally. We’re advising our portfolio firms to bolster their balance sheets in preparation for potential downturns in 2026, while maintaining a focus on long-term growth over quick funding.
Taylor
It’s an exciting time to back founders poised for long-term growth! From a fund manager’s perspective, 2026 looks promising for both deployment and liquidity. Last year, we saw 12 liquidity events through mergers and acquisitions and secondary offerings. This is vital as venture has expanded significantly over the last two decades, yet paths to liquidity haven’t kept pace. The evolution of a cohesive liquidity strategy—mergers, secondary sales, and IPOs—will be crucial for founders dedicating decades to their ventures.
At the same time, we observe real shifts in core sectors. Fintech, especially stablecoins, transitioned from experimental phases to mainstream adoption in markets like Latin America and Africa. In these areas, this technology is becoming essential infrastructure, making 2026 a great time for capital deployment.
Bankiya
We remain on the lookout for outstanding European founders creating innovative companies. Great businesses can emerge in any cycle.
What will happen to all the investor and startup interest in AI next year?
Norman
In 2026, the initial “AI curiosity” of the past two years will evolve into a demand for application and scalability. We’re shifting from a phase focused on model creation to one centered on business development. The quickest, most innovative companies aren’t necessarily those with the largest models; they’re the ones applying AI to solve complex, domain-specific challenges that were previously difficult to scale.
Blumberg
Investor and startup interest is likely to remain at all-time highs. However, we may begin to see acquisitions, “acquihires,” and closures in saturated sectors like coding and marketing automation as market share consolidates around a select few successful companies.
Taylor
Interest will persist. However, by the end of 2026, I believe AI won’t stand alone as a category; it will become an integrated part of every new technology startup. While the current excitement surrounding AI is understandable, we’re still in the early stages of grasping its transformative potential. In such times, enthusiasm often outpaces thorough understanding. Some companies will be groundbreaking, while many will not, leading to an adjustment in pricing as real-world use cases emerge. The value lies not in branding everything as “AI” but in recognizing where AI meaningfully influences cost, speed, or decision-making in actual businesses—the areas where lasting value will be created.
We’re in a moment of foggy uncertainty, and that’s often when outcomes vary the most.
Chang
I don’t see this momentum slowing anytime soon. We’ve observed substantial investments in infrastructure; this year, we expect those investments to begin translating into significant enterprise value at the application level.
Bankiya
AI will stay a high-interest topic unless there are drastic negative influences that alter the landscape, like an energy crisis or spikes in default rates.
What is something unexpected that could happen in 2026 in the world of venture and startups?
Norman
One surprising development in 2026 may be the quiet conclusion of the “ChatGPT-first” approach in startups. This won’t be due to a decline in the importance of generative AI, but rather because no single model will dominate as the starting point. As AI models diversify, tech companies will have to redesign their products accordingly. Founders in 2026 who adapt to a multi-model environment will shift their focus toward specialization.
For example, Anthropic is gaining traction because Claude Code excels in collaborative building. Google, with Gemini 3, is combining top-notch image and video generation with powerful multimodal capabilities. This combination is creating strong competitive advantages. In 2026, the choice of model will be more about infrastructure rather than a competitive edge. The winners will be those that efficiently integrate multiple models, simplify complexity for users, and develop proprietary workflows.
Blumberg
Many successful startups may emerge with only one or two rounds of funding due to AI tools enabling early-stage companies to reach profitability without excessive expenditures. While large language models (LLMs) will be ubiquitous, companies might scale back their use in favor of more controlled applications as they prioritize clarity, costs, and reliability. This could lead to increased reliance on smaller or hybrid models.
Taylor
The end of the Russia-Ukraine conflict could usher in a wave of investment in Ukrainian founders, recognized as some of the best globally! Additionally, two surprising trends will emerge: an uptick of international firms, particularly from Latin America, going public in New York, and significant technology IPOs from the Middle East, with local listings. With companies like Tabby debuting on the Saudi Stock Exchange, it will challenge conventional views on global tech leadership.
