Each year, we ask some top investors what they think the next year will bring. Last year, some investors thought the IPO market would be back up and running by now (which didn’t quite happen), while others thought the momentum behind AI was poised to accelerate (and they were right). This year, TechCrunch did the same thing, talking to five investors from various markets about what they are preparing for in 2026.  

Here is what they said.  

What will it take for a founder to raise next year, compared to last year?  

James Norman, Managing Partner, Black Ops VC 

Raising in 2025 requires a shift from “visionary” to “battle-tested.” In previous years, capital has been a primary moat; now investors are wary of “pilot purgatory,” where enterprises test AI solutions without an urgent need to buy. In 2026, the bar is rising. Founders must prove to VCs they have more than just traction; they need a distribution advantage. Investors are digging deeper into repeatable sales engines, proprietary workflow/processes, and deep subject matter expertise that holds up against the “capital arms race.” VCs no longer care about who’s first to market with a flashy demo. They want to know who’s building something that can last, earn trust, and scale long-term.

Morgan Blumberg, Principal, M13 

We believe the funding markets will always be available for the best founders, but the bar will rise. At the earliest stages, especially in AI application software, I do expect fewer mega seed rounds given intense competition and capital already deployed across many categories. Founders will need to stand out with unique distribution channels or perspectives, not just by relying on a large market opportunity and strong backgrounds. Capital moats have already formed around crowded sectors. At the Series A and B stages, top-quartile rounds will require clear evidence of explosive momentum. The market has now adjusted to these expectations with increased scrutiny on the sustainability of revenue.

Allen Taylor, Managing Partner, Endeavor Catalyst  

Bigger, faster, better: bigger total addressable market, faster growth, better unit economics. We made 50 investments last year across 25 countries, and we expect to do more this year, so we’re seeing founders at very different stages and in very different markets. The strongest founders aren’t just showing what they’ve built so far — they’re helping investors understand where the business is going next. Real revenue and real customers still matter, but they’re not sufficient on their own. As an investor, I’m always asking: Where is this company today, and where could it realistically be in the next 12, 18, or 24 months? The founders who raise are the ones who can answer that question clearly and credibly.

Dorothy Chang, Partner, Flybridge Capital

A lot of founders are finding it easy to build new things because generative AI coding tools are so advanced today. But in truth, those tools are leveling the playing field for everyone, and competition is more fierce than ever. So founders building for venture scale need to make sure that they are (1) truly tackling a big idea, not just something that’s easy to vibe code; (2) building in a problem area that they are uniquely positioned to win; and (3) bringing something proprietary that can’t easily be replicated. This could be a contrarian approach with unique insights, proprietary access to data, deep networks/relationships, a technological advantage, etc. These aren’t new concepts, but the stakes and expectations are higher than ever.

Shamillah Bankiya, Partner, Dawn Capital

For founders selling to enterprises, I think the entire world has gotten smarter on the value that AI can deliver, and as such, proving — showing line of sight to ROI — will be more important than ever to investors. Founders who can prove that their products offer much higher value have the best shot at raising capital.

What areas are you looking to invest in and why? 

Norman

As a fund, we remain industry-agnostic generalists, but we are always sharpening our lens. Today we’re looking for “high-context founders.” In a world where AI has commoditized the ability to write code, the winning edge is now lived experience. We want to invest in the founder who has spent years in the trenches of a complex industry and possesses the bespoke expertise that can be 10x’d by AI. For us, the ideal investment is a marriage of deep subject matter expertise and a “day zero” distribution advantage, meaning founders don’t just know what to build but already know exactly who is going to buy it.

Blumberg  

We are particularly interested in sleepy or legacy industries that sit outside core tech founder appetite, where AI can offer step-change ROI that drives adoption. These markets have lower competition and moats driven by complexity that often come with less obvious sectors. We also believe 2026 will be a great year for infrastructure supporting foundational model development, as well as frontier research categories like embodied AI and world models. Healthcare remains a major focus given clear signs of buyer demand; we focus on systems of record and platforms rather than point solutions.

Taylor 

Outside the United States! The best risk-adjusted venture returns are not in Silicon Valley anymore. They are in markets like Poland, Turkey, and Greece.

When you invest across 25 countries in a single year, you stop thinking of venture as something that happens in one place and then spreads outward. Twenty years ago, roughly 90% of venture dollars went to the United States. That flipped in 2018. Today, more than half of venture investment — and more than half of the world’s unicorns — are outside the U.S.

We see this every day. Founders in Latin America, Africa, the Middle East, and South Asia are building venture-scale companies — often serving massive markets from the start. In our pipeline, it’s normal to see founders from Venezuela building in Iraq, or from Sudan building global businesses.

Chang

I’m most interested in founders who are tackling massive problems and leveraging technology for forward progress. I’m rather unmoved by the plethora of startups focused on agentically automating workflows for specific verticals. I’m much more interested in the larger platform shifts that will define this era of technological and societal progress.

Bankiya

We’ve seen tremendous impact on software from AI. I think the next frontier is at the intersection of software and hardware. Most of the world’s GDP is locked up in physical industries, and software-only solutions aren’t enough to fully unlock the world’s 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 ideal, but because the system is running out of viable alternatives. We’re approaching a tipping point where the private market’s ability to sustain multibillion-dollar valuations, often disconnected from profitability or liquidity, is wearing thin. Years of “paper markups” have postponed reality, but they haven’t eliminated it. Companies, boards, and late-stage investors increasingly need a mechanism to reset expectations, generate real liquidity, and re-establish price discovery. 

Private credit has acted as a stopgap, extending runways without forcing valuation discipline. But that bridge is starting to look more like a pressure cooker. Debt can delay decisions, not solve structural capital needs, especially for companies built for equity-style growth. At some point, fresh capital becomes necessary, and public markets remain the only place capable of providing it at scale. Their growth narratives and strategic importance can provide the “air cover” needed to reopen the IPO window. Once investors re-engage around category-defining leaders, it creates permission for the broader high-growth software sector to follow.

Blumberg 

I think we will see a reopening of the IPO markets driven by the backlog of companies planning to list. Many large tech IPOs are anticipated, including darlings like Anthropic and OpenAI, and I believe one of these mega IPOs will drive considerable momentum for others. 

Taylor 

Yes — 2026 will be a big year for IPOs in New York as dozens of the top companies simply decide “it’s time.” It will also be a banner year for tech IPOs in places folks are not used to seeing them — like the stock market in Saudi Arabia. 

I think people underestimate how global the thaw will be. We’ve had nearly four years of muted IPO activity, which has created a backlog of high-quality companies that are ready to be public. When the window opens, it won’t just be U.S. companies stepping through it. There’s already a cohort of major U.S.-listed technology companies from Latin America, including MercadoLibre and Nubank, and there’s another wave right behind them that public-market investors haven’t fully priced in yet. I don’t think all of those companies list in 2026, but several will. 

What’s even more unexpected is what happens locally. You’re going to see meaningful technology IPOs in places like Saudi Arabia, listed on the Saudi Stock Exchange (Tadawul). When companies like Tabby [a buy now, pay later outfit] go public locally, it will challenge assumptions about where global tech outcomes happen. 

Chang

We’re looking to make slightly fewer, more concentrated bets. There is a ton of startup activity, so when we meet founders who really stand out, we want to be able to back up our high conviction with a higher check size and higher ownership percentage.

Bankyia

I think a hard catalyst would be required to reset the IPO markets — something akin to mega AI players facing unprecedented cost increases or sharp revenue declines. Think, for example, of energy prices sharply rising, such that it’s unaffordable to offer compute for AI training and inference.

How are you looking at the venture market for next year as a fund manager? 

Norman  

We’re entering what I’d describe as a clearing event for the venture market, and next year will separate durable platforms from transient ones. The fallout will hit Fund I managers who haven’t found their footing, and active Fund II managers struggling with a [distributions-paid-in-capital, or DPI] drought from 2021 vintages. Traditional institutional anchors, particularly university endowments, are effectively in repair mode. After being squeezed by the absence of liquidity in 2021 and 2022, many are leaning on secondaries, pacing adjustments, and portfolio-smoothing strategies just to maintain existing commitments. 

That means fewer new relationships and far less tolerance for emerging or undifferentiated managers. Stepping into their place are family offices that have moved from passive LP roles to active market forces. They aren’t just filling the “LP oxygen” left by retreating institutions; they are scoping direct mandates and using [registered investment advisors] to hunt for unique, high-conviction strategies.

In 2026, there is no viable middle ground. You need to have a clinical, defensible track record and/or truly unfair access to differentiated deal flow. Lightly grounded generalist positioning, soft networks, and “good enough” performance won’t survive this cycle.

Blumberg  

We believe we are in the early innings of AI transformation, so we expect next year to be a strong vintage. Capital continues to concentrate in a select number of winners so we focus on being selective and operationally supporting our companies to earn our right to concentrate. We are advising our portfolio companies to strengthen their balance sheets in case of a downturn in 2026 while focusing on building for the long term rather than optimizing for fast funding.

Taylor  

Amazing time to back the boldest founders building for the next 10+ years! From a fund manager’s perspective, 2026 looks strong on both deployment and liquidity. Last year we had 12 liquidity events — all through M&A and secondaries. That matters because venture has grown dramatically over the last two decades, while paths to liquidity didn’t keep pace. What’s changing now is that venture is building a more complete liquidity toolkit — M&A, secondaries, and IPOs working together. 

That’s critical when founders are committing 10, 15, even 20 years to building companies. At the same time, we’re seeing real structural shifts in core sectors. Financial technology, especially stablecoins, moved from experimentation to mainstream adoption in 2025, particularly in markets like Latin America and Africa. In those places, this isn’t speculative technology; it’s infrastructure. That combination is why 2026 looks like a strong year to be deploying capital.

Bankyia

We’re still searching for phenomenal European founders building groundbreaking companies. Great companies are formed in all cycles.

What will happen to all the investor and startup interest in AI next year? 

Norman  

In 2026, the “AI curiosity” that fueled the last two years is being replaced by a demand for application and scale. We are moving from the era of building models to the era of building businesses. The fastest, most innovative companies aren’t the ones with the largest LLMs; they are the ones using AI to solve high-value, domain-specific problems that were previously too complex or too manual to scale. Investors aren’t looking for “AI startups” anymore; we’re looking for exceptional tech founders who have found a way to use this intelligence to 10x the efficiency of a massive, traditional market.

Blumberg  

We expect investor and startup interest to continue at all-time highs. However, I do think we will start to see tuck-in acquisitions, acquihires, and wind-downs in highly concentrated sectors such as coding automation, sales automation, marketing, and advertising as market share starts to concentrate in select assets.  

Taylor  

It will continue. But by the end of 2026, I predict AI will stop being a separate category, as it will just be a part of all new technology companies being built. 

There’s a lot of breathless talk about AI right now — and that’s understandable. We’re still very early in understanding what this technology will actually change. In moments like this, excitement tends to run ahead of clarity. Some companies will be transformational, many won’t, and pricing will take time to adjust as real use cases emerge. The opportunity isn’t in labeling everything as “AI.” It’s in understanding where AI meaningfully changes cost structures, speed, or decision-making inside real businesses. That’s where durable value gets created.

This is one of those moments when the fog is thick, and that’s when outcomes diverge the most. 

Chang

I don’t see it slowing down anytime soon. We’ve seen a lot of dollars go into infrastructure and theory; this year we’ll see a lot more of that investment more clearly turn into enterprise value at the application level.

Bankyia

AI will remain a hot topic, barring negative hard catalysts that dramatically change conditions, like an energy crisis or a rise in default rates.

What is something unexpected that could happen in 2026 in the world of venture and startups? 

Norman  

One of the most unexpected shifts of 2026 will be the quiet end of the “ChatGPT-first” era in startups. Not because generative AI loses importance, but because no single model remains the default starting point. GPT is no longer consistently best-in-class for search, image generation, or video, which fundamentally changes how tech companies architect their products. The savvy founders in 2026 have already graduated to a multi-model world, and instead their focus has shifted to specialization. 

For example, Anthropic has effectively captured the developer’s mindshare because Claude Code is better at building with you, and Google has finally activated its structural advantages. With Gemini 3, it’s pairing top-tier image and video generation with deep multimodal capability and native access to Google’s search and data ecosystem. That combination is proving hard to compete with. Model choice becomes an infrastructure decision, not a moat. The winners in 2026 won’t be the companies that “use GPT,” but the ones that orchestrate multiple models seamlessly, abstract complexity away from users, and build proprietary workflows on top.

Blumberg  

We expect to see many successful startups built with only one or two rounds of capital. AI tooling (especially coding automation) enables many early-stage companies to accomplish profitability without excessive burn. From a technology perspective, while LLMs are expected to be everywhere, companies will start to scale back usage in favor of more controlled use as enterprises prioritize explainability, cost, and reliability. This could drive heavier use of small models, deterministic and probabilistic hybrid models, world models, or simulation modeling.

Taylor 

The end of the Russia-Ukraine war will bring about a renaissance of investing in Ukrainian founders, who are some of the best in the world! Two additional things will genuinely surprise people. First, international companies — especially from Latin America — going public in New York at scale. Second, major technology IPOs coming out of the Middle East, listed locally. When companies like Tabby go public on the Saudi Stock Exchange (Tadawul), it will reset expectations about where global tech leadership lives.