More than the eye can VC: What’s trending in 2026

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An FYI on VCs: Need a hint on VC trends? Fidelity Private Shares®’ report, 2026 VC Trends That Could Make or Break Startups, analyzes US venture capital activity across three major startup ecosystems using deal, fund, valuation, and exit data through December 2025. Read it.*

Wonders of the world include the Colosseum, the Great Wall of China, and a venture capitalist’s checkbook.

What makes the latter such a rare sight is that Fidelity Private Shares® notes that VCs are writing fewer (yet larger) checks, often concentrated in AI and late-stage companies. Everyone else? They’ll need to navigate a tighter, more scrutinized fundraising environment where clean equity, financial discipline, and a clear story matter more than ever.

But fear not: You’re not alone in this financial hero’s journey. We’ve teamed up with Fidelity Private Shares (FPS) to explore this landscape and how founders can make it work. We’ll be leveraging FPS’ guide, 2026 VC Trends That Could Make or Break Startups, to light the way.

And on our travel companion: FPS is a trusted equity management platform for growing private companies. From early rounds to IPO, they bring clarity to complex ownership, connecting cap tables, 409A valuations, data room, and modeling tools for next-round and exit planning.

FPS commissioned this annual research report in collaboration with PitchBook, a leading data provider for private market intelligence. The report analyzes US venture capital activity across the three major startup ecosystems—the Bay Area, New York, and Boston—using deal, fund, valuation, and exit data through Dec. 31, 2025.

Let’s see what’s trending to help cross a VC check off a founder’s bucket list.

Market analysis: 2025 vs. 2026

According to FPS, fundraising may have slowed, but money’s still moving and grooving.

2025 may have marked the weakest VC fundraising in a decade (558 funds, $66.5b raised), but dry powder from previous years continues flowing into fewer, larger late‑stage deals.

FPS’ guide explains that 2025 was quite the ride: “Liberation Day” tariffs caused one of the steepest market sell-offs since the pandemic. Nvidia became the first $5 trillion company, and the anticipated listings of CoreWeave, Figma, Klarna, and other headliner companies were completed.

In comparison, “2026 capital deployment will be driven by 2022–2024 vintage dry powder that was raised before LP overallocation to private markets was corrected, amid higher rates and a slower exit environment that delayed deployment,” FPS notes.

In 2026, rumored IPOs of high-profile companies like OpenAI, Anthropic, and Databricks could mark a significant turning point for fund economics. Keep your eyes peeled.

And if these listings make it and foster strong post-IPO performance, tech founders could find themselves switching from price-takers to price-setters. Public market outcomes could really reset expectations.

West coast, best coast? Capital is concentrating

For VC, that is.

The scoop is that the Bay Area dominated US funding (53% of VC dollars), driven heavily by AI. Software actually led nationwide, according to FPS, while Boston remained biotech‑centric (which makes sense when you know that Boston’s usually cutting-edge when it comes to healthcare).

Founders, what you’re trying to get off the ground could be heavily influenced by your neck of the woods. Consider if you’re more in the AI space or if you sway biotech before seeking out area VCs.

All it takes is a quick peek at Silicon Valley to understand that this tracks. The streets of San Francisco often see Waymos and bot-led food delivery carts rolling all over town. Right now, it seems the appetite for AI is really all VCs have room on their plates for.

AI vs. the world

Speaking of AI, FPS’ guide explains that AI vs. non‑AI valuations are splitting apart.

AI startups raised dramatically larger rounds—the average AI deal sizes hit $51 million, vs. $4.7 million for non-AI. That’s a 10.9x difference, up from 8.4x in 2024, creating a widening valuation gap across major hubs.

“As news headlines would suggest,” FPS’ guide notes, “AI dominated US venture funding trend lines in 2025, and this momentum is not expected to slow down going into 2026. Expectedly, the Bay Area was responsible for the US’ AI-driven dealmaking frenzy in 2025, where 71% of capital raised and 34% of deal volumes in the city were in AI companies, while contributing to 53% of US VC financings.”

New York and Boston, as previously touched on, saw slower activity.

So is AI saturated in the West, or is it booming in general? FPS highlights that because AI is increasingly viewed as the market’s primary value driver, and that perception boosts concentration within the sector.

Case in point: US AI M&A surged to 647 deals totaling $113.7 billion, with acquisition velocity outpacing formation. “For every 85 AI startups receiving initial VC funding,” FPS shares, “100 were acquired.”

Liquidity is improving selectively

As seen in our discussion on the West and AI, selectivity has been the name of the game for VCs. It’s not necessarily that they’re investing less, just that they’re being more specific. But the storyline’s up: AI is concentrated in Silicon Valley, and thus the West Coast is seeing a higher concentration of VC attention.

In terms of liquidity right now, FPS explains that exit value nearly doubled in 2025 ($154.7b to $301.6b), AI M&A surged, the IPO window is cautiously reopening, and secondary markets are becoming more mature. So far, so good.

A tip from FPS: “Acquisitions remain the most likely exit for most companies. Acquirers want clean documentation, no surprises in diligence. The average path to liquidity is now 10+ years. Equity must work as a long-term retention tool, not just an exit event.”

Success is clearly influenced by the right place, right time mentality. More specifically, choosing the right exit path at the right time in a market currently defined by concentration and not broad-based discovery.

Outlook

Founders, 2026 will likely not be too different from 2025; however, the defining themes of 2025 (AI, geopolitical dynamics) could continue shaping investor appetite and, thus, your strategy.

To recap: AI is reallocating capital from other sectors (and geographical landscapes) towards the software industry. Founders not operating inside AI will likely be driven by ongoing geopolitical dynamics. FPS shares that this means sectors tied to domestic supply chain resilience and national security are positioned potentially favorably.

And lastly, FPS notes that liquidity dynamics in 2026 will be shaped by a push-and-pull between historically solid secondaries activity and the potential reopening of the IPO window.

But as you’re well aware, no opportunity exists without risk. Be financially disciplined, tell your story clearly so your market fit makes sense, and be able to defend against AI commoditization.

Grab Fidelity Private Shares’ full guide to stay prepared, and go get ’em. (Don’t forget why you started.)