TechCrunch recently surveyed five prominent venture capitalists from diverse markets to gather their insights and predictions for the startup and investment landscape in 2026. Following a year where some IPO market hopes were dashed but AI momentum surged, these investors weigh in on what founders need to succeed, where capital will flow, the fate of the IPO market, and the evolving role of artificial intelligence.
Founder Fundraising in 2026: A Higher Bar
The consensus among investors is that the bar for founders seeking capital in 2026 will be significantly higher. The era of "visionary" pitches is giving way to a demand for "battle-tested" solutions and demonstrable results.
James Norman, Managing Partner, Black Ops VC
According to James Norman, managing partner at Black Ops VC, founders must move beyond mere traction to prove a clear distribution advantage. Investors are scrutinizing repeatable sales engines, proprietary workflows, and deep subject matter expertise that can withstand intense competition. The focus is shifting from flashy demos to building sustainable, trustworthy, and scalable businesses.
Morgan Blumberg, Principal, M13
Morgan Blumberg, principal at M13, echoes this sentiment, noting that while funding will always be available for exceptional founders, the criteria will be stricter. Mega seed rounds, particularly in AI application software, are expected to decrease due to intense competition. Founders will need unique distribution channels or perspectives, not just strong backgrounds or large market opportunities. For Series A and B rounds, explosive momentum and sustainable revenue will be critical.
Allen Taylor, Managing Partner, Endeavor Catalyst
Allen Taylor, managing partner at Endeavor Catalyst, summarizes the new requirements as "bigger, faster, better": a larger total addressable market, faster growth, and improved unit economics. He emphasizes that real revenue and customers are essential but no longer sufficient. Founders must clearly articulate their company's future trajectory over the next 12 to 24 months.
Dorothy Chang, Partner, Flybridge Capital
Dorothy Chang, partner at Flybridge Capital, highlights that while generative AI tools make building easier, they also intensify competition. Founders aiming for venture scale must:
- Truly tackle a big idea, not just something simple to code.
- Build in a problem area where they possess a unique advantage.
- Bring something proprietary that is difficult to replicate, such as unique insights, data access, strong networks, or technological superiority.
Shamillah Bankiya, Partner, Dawn Capital
Shamillah Bankiya, partner at Dawn Capital, states that for enterprise-focused founders, proving a clear line of sight to ROI for AI-driven products will be paramount. Products offering significantly higher value will have the best chance of securing capital.
Key Investment Areas for 2026
Investors are sharpening their focus on specific sectors and founder profiles.
James Norman, Managing Partner, Black Ops VC
Norman's fund is seeking "high-context founders" with deep, lived experience in complex industries, whose bespoke expertise can be amplified tenfold by AI. The ideal investment combines this expertise with a "day zero" distribution advantage, meaning founders not only know what to build but also who will buy it.
Morgan Blumberg, Principal, M13
Blumberg is particularly interested in "sleepy" or legacy industries often overlooked by core tech founders, where AI can deliver significant ROI and drive adoption. These markets offer lower competition and complexity-driven moats. M13 also sees 2026 as a strong year for infrastructure supporting foundational model development and frontier research like embodied AI and world models. Healthcare remains a key focus, especially systems of record and platforms, due to clear buyer demand.
Allen Taylor, Managing Partner, Endeavor Catalyst
Taylor points to opportunities outside the United States, citing markets like Poland, Turkey, and Greece for the best risk-adjusted venture returns. He notes that over half of global venture investment and unicorns are now found outside the U.S., with founders in Latin America, Africa, the Middle East, and South Asia building venture-scale companies for massive markets.
Dorothy Chang, Partner, Flybridge Capital
Chang is drawn to founders tackling massive problems and leveraging technology for significant societal and technological progress, rather than startups focused solely on automating specific workflows.
Shamillah Bankiya, Partner, Dawn Capital
Bankiya believes the next frontier lies at the intersection of software and hardware. With most of the world's GDP locked in physical industries, software-only solutions are insufficient to unlock full growth potential.
Will the IPO Market Thaw in 2026?
The general sentiment among investors is optimistic about a reopening of the IPO market.
James Norman, Managing Partner, Black Ops VC
Norman predicts a thaw, not because conditions are suddenly ideal, but because the private market is running out of viable alternatives to sustain multi-billion-dollar valuations often detached from profitability. Years of "paper markups" have delayed reality, and companies, boards, and late-stage investors need mechanisms for resetting expectations, generating liquidity, and re-establishing price discovery. While private credit has provided a temporary stopgap, public markets remain the only source for fresh capital at scale, especially for category-defining leaders.
Morgan Blumberg, Principal, M13
Blumberg anticipates a reopening driven by a backlog of companies ready to list. She believes that one of the many anticipated mega IPOs, such as Anthropic or OpenAI, will create significant momentum for others.
Allen Taylor, Managing Partner, Endeavor Catalyst
Taylor expects 2026 to be a significant year for IPOs, both in New York and in unexpected global markets like Saudi Arabia. He highlights a four-year backlog of high-quality companies ready to go public, and predicts a global thaw that will see U.S.-listed tech companies from Latin America (like MercadoLibre and Nubank) and major local tech IPOs in places like the Saudi Stock Exchange (Tadawul) with companies such as Tabby.
Shamillah Bankiya, Partner, Dawn Capital
Bankiya offers a more cautious view, suggesting that a "hard catalyst" would be required to truly reset the IPO markets. This could involve unprecedented cost increases or sharp revenue declines for mega AI players, such as an energy crisis making AI training and inference unaffordable.
The Venture Market from a Fund Manager's Perspective
Fund managers are preparing for a transformative period.
James Norman, Managing Partner, Black Ops VC
Norman describes 2026 as a "clearing event" that will distinguish durable platforms from transient ones. He foresees challenges for early-stage funds and those struggling with liquidity from 2021 vintages. Traditional institutional investors are in "repair mode," leading to fewer new relationships and less tolerance for undifferentiated managers. Family offices, however, are stepping in, actively seeking unique, high-conviction strategies. Success in 2026 will demand a clinical, defensible track record or truly unfair access to differentiated deal flow.
Morgan Blumberg, Principal, M13
Blumberg believes 2026 will be a strong vintage, marking the early stages of AI transformation. Capital will continue to concentrate in a select number of winners. M13 advises its portfolio companies to strengthen their balance sheets and focus on long-term building rather than optimizing for quick funding.
Allen Taylor, Managing Partner, Endeavor Catalyst
Taylor sees 2026 as an "amazing time to back the boldest founders building for the next 10+ years," with strong prospects for both deployment and liquidity. He notes that venture is developing a more complete liquidity toolkit, combining M&A, secondaries, and IPOs. This is crucial as founders commit longer terms to building companies. He also highlights structural shifts in core sectors, such as financial technology and stablecoins moving from experimentation to mainstream adoption, particularly in Latin America and Africa, where they are seen as infrastructure rather than speculative technology.
Shamillah Bankiya, Partner, Dawn Capital
Bankiya emphasizes that great companies are formed in all cycles, and Dawn Capital continues to search for phenomenal European founders building groundbreaking companies.
The Future of AI in Venture
The pervasive interest in AI is expected to evolve significantly.
James Norman, Managing Partner, Black Ops VC
In 2026, "AI curiosity" will be replaced by a demand for application and scale, marking a shift from building models to building businesses. The most innovative companies will use AI to solve high-value, domain-specific problems that were previously too complex or manual. Investors will seek exceptional tech founders who leverage AI to tenfold the efficiency of massive, traditional markets.
Morgan Blumberg, Principal, M13
Blumberg expects investor and startup interest in AI to remain at an all-time high. However, she anticipates tuck-in acquisitions, acquihires, and wind-downs in highly concentrated sectors like coding, sales, marketing, and advertising automation, as market share consolidates among leading assets.
Allen Taylor, Managing Partner, Endeavor Catalyst
Taylor predicts that by the end of 2026, AI will cease to be a separate category, becoming an inherent part of all new technology companies. He cautions against "breathless talk" and emphasizes understanding where AI genuinely changes cost structures, speed, or decision-making within real businesses to create durable value.
Dorothy Chang, Partner, Flybridge Capital
Chang sees no slowdown in AI interest. While much investment has gone into infrastructure and theory, she expects 2026 to see more of this investment clearly translating into enterprise value at the application level.
Shamillah Bankiya, Partner, Dawn Capital
Bankiya agrees that AI will remain a hot topic, unless negative "hard catalysts" like an energy crisis or a rise in default rates dramatically alter conditions.
Unexpected Developments in 2026
Investors also shared their thoughts on potential surprises.
James Norman, Managing Partner, Black Ops VC
Norman foresees the quiet end of the "ChatGPT-first" era. No single model will remain the default starting point, as GPT is no longer consistently best-in-class across all applications. Savvy founders will operate in a multi-model world, focusing on specialization. He cites Anthropic's Claude Code for developer mindshare and Google's Gemini 3 for its multimodal capabilities and native access to Google's ecosystem. Model choice will become an infrastructure decision, not a moat, with winners orchestrating multiple models seamlessly and building proprietary workflows.
Morgan Blumberg, Principal, M13
Blumberg expects many successful startups to achieve profitability with only one or two rounds of capital, thanks to AI tooling (especially coding automation) reducing burn. Technologically, while LLMs will be ubiquitous, enterprises will scale back their usage in favor of more controlled applications prioritizing explainability, cost, and reliability. This could lead to increased use of small models, hybrid models, world models, or simulation modeling.
Allen Taylor, Managing Partner, Endeavor Catalyst
Taylor predicts three surprising developments: the end of the Russia-Ukraine war leading to a renaissance of investing in Ukrainian founders; international companies, particularly from Latin America, going public at scale in New York; and major technology IPOs emerging from the Middle East, listed locally on exchanges like the Saudi Stock Exchange (Tadawul), challenging assumptions about global tech leadership.
