US Venture Capital Outlook: Midyear Update

Six months into 2026, the US venture market has produced record-breaking headlines and exhibited persistent structural contradictions in equal measure. Our midyear update to the four outlooks we published in December examines both developments, tracking what has materialized and what remains unresolved as the second half of the year approaches.

The early-stage surge we anticipated has arrived ahead of schedule, driven by AI’s compression of company-building costs and the continued deepening of megafund participation at seed and Series A. First financings are on track to exceed 7,000 by year-end, a new record by more than 1,300 deals. Late-stage and venture-growth activity has been even more striking: The $274.2 billion in venture-growth capital deployed through May is already more than double the full-year 2025 total, though 86.4% of that figure traces back to four rounds from three foundation model companies. Fundraising, meanwhile, has concentrated sharply at the top, with funds over $1 billion capturing nearly 72% of capital raised YTD, while first-time managers have accounted for less than 10%. READ MORE

Robotics Startups On Fire As Venture Funding Surges To Record Numbers In 2026

Robotics startup funding hit a record high in 2025, per Crunchbase data. And that trend is continuing in 2026 so far, with funding to the sector already eclipsing 2025’s totals.

Globally, robotics startups have so far raised $18.8 billion in 2026, compared to $15 billion in the full year of 2025. The figure also handily surpasses the $14.1 billion raised in the peak venture funding year of 2021, and we still have more than six months of fundraising left. READ MORE

PE firms want software deals, but lenders don't want to fund them

While some PE firms want to push ahead and buy companies they believe will thrive in the AI era, their calls for term sheets are being turned down—a sudden retreat by longtime partners that has left sponsors frustrated.

"For some of these deals, lenders just say, 'Don't even think about it. We have too much software exposure. We are not going to fund another software buyout,'" said one M&A lawyer, who added they are working on two deals where parties have completed due diligence but no committed lender has been found. READ MORE

PE has yet to prove its AI bets to investors

Private equity firms have raced to embed AI into portfolio companies, betting it will reshape businesses and boost valuations, yet few have results to show for it.

A round of conversations with advisers provided a reality check on the hype, laying bare the distance between what the PE industry is hankering for from AI and what its experiments have delivered so far. While most firms have been tinkering enthusiastically, many haven’t done it in a way that has translated into financial gains. READ MORE

Tech Is Globalizing. The Money Is Lagging

In the final days of SuperReturn in Berlin, SpaceX priced the largest IPO in history, raising $75 billion at a valuation near $1.75 trillion, and later growing to over $2 trillion. I had spent that week in Berlin and the week before at South Summit in Madrid.

For a decade I have argued that talent is global and capital is provincial.

Two weeks of conferences left me with a sharper version of the same point: tech has globalized, but the money has not (yet) caught up. READ MORE

Investment in defense tech is soaring as Pentagon encourages venture capitalists to participate

The venture capital industry is pumping record levels of private cash into American defense technology companies — considered a controversial investment in the past — in a way that national security insiders say is transforming the U.S. military industrial landscape.

Defense technology companies such as Anduril, Palantir, Shield AI, Saronic and a slew of others have raised more than $14.6 billion in private investment so far this year, according to Crunchbase, an artificial intelligence-powered dashboard and search engine that tracks private and public companies. READ MORE

The 100-Day Cost Reset in Private Equity

The playbook that built private equity returns over the past decade is losing its edge. Multiple expansion has compressed. Leverage is more expensive and harder to access. Market timing is less reliable. What remains, and what now accounts for a growing share of fund-level returns, is operational value creation: margin expansion, cash discipline, and the capabilities to sustain both.

Operating partners often feel this pressure most directly. Many own the performance trajectory of assets from day one. And they know that episodic cost cutting—a round of procurement savings here, a hiring freeze there—does not produce the kind of durable, defensible margin improvement that holds up at exit. READ MORE

Silicon Valley founders are publicly roasting VCs online. Here are their wildest stories

Over the past few days, some Silicon Valley tech founders have taken to the internet to publicly roast the venture capitalists they once pitched.

The kefuffle began last week when Greg Isenberg, the host of "The Startup Ideas Podcast," posted to X about his experience raising a $15 million Series A.

"12 people in the meeting. One of the GPs fully fell asleep. Out cold for 30+ minutes. Nobody acknowledged it. Everyone just kept going," Isenberg wrote, referring to an unnamed general partner. READ MORE

Mercor’s Brendan Foody calls out Sequoia, accusing it of ‘dual-pricing’ valuation tricks

In recent days, founders and founders-turned-investors took to X to share horror stories about being mistreated by VCs. Their complaints ranged from VCs falling asleep during pitch meetings to investors suggesting a founder fire a co-founder.

Brendan Foody, co-founder of the AI talent platform Mercor, which was last valued at $10 billion, went so far as to call out Sequoia, arguably one of the most elite VC firms in the world. READ MORE

Silicon Valley’s new buyout playbook is hitting Wall Street

Venture capital is buying its way into the artificial intelligence transformation that enterprise software hasn’t delivered. Instead of selling AI tools to companies, venture firms are buying legacy companies outright and rebuilding them around AI from the inside.

The bet puts VCs on offense and leaves traditional private equity, which spent the last cycle buying enterprise software at peak prices, on defense. READ MORE

A VC pleads: ‘Founders, please stop using AI to write pitches’

“Lame cold pitch from the US”.

That was the subject line of a recent email with a clear ask that actually caught my attention.

And as an investor who receives dozens of startup pitches and even more follow-ups each week that’s saying something. It wasn’t in a professional tone and it wasn’t polished, rather subtly self-deprecating but undeniably honest. READ MORE

Why the Best AI Investors Are Also Builders

For decades, venture capital has operated on a relatively simple premise: Back exceptional founders early, provide capital, open doors and help companies scale. In prior technology waves​—​​​cloud computing, mobile, or ​software as a service—​​​that formula often worked. Investors did not need to be operators themselves to add value. Pattern recognition, networks and conviction were enough to matter.

​​​Artificial intelligence is changing that model. READ MORE

Defense Startup Funding Hits An All-Time Record As VCs Begin To Eye Exits

A decade ago, defense tech was considered a niche, even controversial corner of venture capital, with few startup investors daring to place bets on companies working with the military.

How times have changed. Already this year, more than $14.6 billion in venture investment has gone into companies in Crunchbase’s military, national security and law enforcement categories, blowing past the sector’s previous annual record of $9.6 billion raised in all of 2025. READ MORE