The team at Foresight Valuation Group is working at the intersection of intellectual property (IP), startups and innovation. As we look toward 2026, we are seeing a venture and startup valuation environment that is not rebounding broadly. Rather, it is concentrated around fewer companies, selected sectors, and innovative funding paths. Below are the key trends that we predict for 2026:

1. Venture funding recovery slowed down by exit bottleneck

We are seeing that overall venture funding remains meaningfully depressed relative to the 2021 high-water mark. Despite a modest uptick in deal activity, exit constraints continue to dominate market behavior. In 2024, only about 40 out of roughly 1,300 venture-backed companies valued at $500 million or more achieved successful exits. This left capital locked up and limiting distributions back to investors. This persistent exit bottleneck is a key reason fundraising remains difficult for venture funds… And why capital deployment heading into 2026 will remain cautious and selective.

2. AI will continue to absorb the majority of venture dollars

The most striking statistic in the current funding market is the degree of concentration in AI. Through the first three quarters of 2025, AI and machine learning accounted for approximately 64.3% of total venture deal value, while representing only about 37.5% of total deal count.  We are also seeing super mega-rounds skewing the funding distribution; nine billion-dollar-plus financings represented nearly 40% of total deal value in Q3 2025 alone. If this pattern continues in 2026, smaller and non-AI startups will face a materially tougher capital environment.

3. Circular funding is emerging as a core AI financing tool

One of the most important trends we are seeing in AI is the rise of circular funding structures, particularly in compute-intensive businesses. In these deals, suppliers provide financing to customers, who then repay that capital through long-term product or service commitments. Several publicly reported AI infrastructure transactions involving NVIDIA illustrate this model. These include arrangements where access to high-demand GPUs is paired with financing or deferred payment structures, allowing AI startups and infrastructure providers to scale quickly while committing future revenue back to the supplier. In some cases, capital effectively flows from the supplier to the customer and back again through guaranteed product purchases. We are seeing this most often in AI because capital intensity is high, supply is constrained, and speed to scale matters.

4. Strong IP portfolios provide funding optionality to startups

Large patent portfolios now provide startups with real optionality across funding structures, partnerships, and exit strategies. Debt funding collateralized by IP is clearly on the rise, particularly in the deep-tech space. Venture debt activity has increased steadily from 2015 through Q3 2025, with new lenders, including private equity firms, entering the market and lending against IP collateral.  Debt funding is non-dilutive and can serve as a bridge between equity rounds, or as a supplement to an equity funding round.

5. New intangibles are emerging as key startup valuation drivers

Patents have always played a key role in startup valuations, particularly in industries like biotech, semiconductors and consumer electronics. One of the valuation trends that we have observed in recent years involves investors placing increasing weight on a variety of intangible assets, not just patents. While patents remain important, especially in deep tech and life sciences, valuation emphasis is shifting toward assets like content and data, which are covered by copyrights or trade secrets. These assets that enable multiple monetization paths, with licensing content/data for LLM training being one of the dominant ones we are seeing in the market today.

Looking ahead to 2026, we believe the defining question will not be whether capital exists, but which startups can translate a diverse portfolio of intangible assets into financing leverage. In a market defined by concentration, those capabilities will increasingly separate the funded from those who are left behind.