Venture capital is having a record year, but the headline hides a bifurcated market story. According to the PitchBook-NVCA Venture Monitor, US startups raised $412.7 billion in the first half of 2026. That is more than any previous full year, including the 2021 peak. Almost all of it went in one direction: AI companies captured 86% of venture dollars, up from 65% in 2025. Mega-rounds of $100 million or more took 87.5% of the capital invested.
AI – and everything else…
The funding market has effectively split in two. In the first half of 2026, the median late-stage pre-money valuation for AI companies was $4.25 billion. For non-AI companies it was $644 million, so AI companies are valued at more than 6 times the rest. Founders outside AI face scarcer capital, longer fundraising cycles and tougher terms.
Outside of AI, mostly “deep tech” sectors such as defense and cybersecurity, that benefit from both the AI ecosystem and global geopolitics. Defense tech startups raised $14.6 billion globally by early June, already above 2025’s record of $9.6 billion for that sector. Cybersecurity startups drew $10.6 billion in funding globally in the first half of 2026, as AI agents opened new attack surfaces. Another observation is that Life Sciences funding remains depressed: biopharma startups raised about $17.7 billion in the first half of 2026 (based on Q1 and Q2 PitchBook data), a small fraction of total venture dollars. Isomorphic Labs’ $2.1 billion round for AI-driven drug discovery is worth noting, as it alone accounted for 20% of biopharma funding in Q2 of 2026.
The exit bottleneck
Getting capital in is only the beginning of the startup journey; getting return on that capital for investors (exit) is the goal of that journey. Exit value hit a record $2.19 trillion in the first half of 2026; however, SpaceX’s $1.77 trillion IPO accounted for most of it. Stuck in what is known as the “exit bottleneck” are 945 US unicorns with a combined value of $5.3 trillion that are still waiting for liquidity. Many of them are SaaS companies priced in 2020–2021 peak valuations. These valuations are based on user-based subscription models that AI agents now threaten. Early 2026’s public software sell-off compressed the multiples buyers are willing to pay. Meanwhile, tech buyout deal value fell about 70% between Q4 2025 and Q1 2026, narrowing the private equity exit route.
How can IP help?
For companies stuck in the bottleneck, or for non-AI companies looking to improve their valuations for funding, underutilized IP assets hold a lot of potential. A SaaS revenue multiple captures recurring revenue. It does not capture the patents, brand, developed technology and know-how a company has built up over a decade. Companies can unlock that IP value in several ways:
- Know what you own. Many companies have never systematically identified and valued their IP. An IP audit maps patents, trade secrets and data assets to products, competitors and potential licensees.
- Monetize it. Licensing, or selling patents outside the core business, generates cash without diluting shareholders. IP-backed lending is also growing: US venture debt reached $64.7 billion in the first half of 2026, nearly matching all of 2025, and lenders increasingly accept IP as collateral.
- Reposition around it. Proprietary datasets and patented methods are exactly what AI-focused buyers want. Building the company’s story around those assets can attract strategic acquirers and support a higher valuation.
- Create optionality. A strong portfolio opens doors to partnerships, spinouts and exit paths beyond a traditional exits, such as M&A or IPO.
- Sectors where IP matters. In deep tech sectors, such as cybersecurity, defense and advanced materials, patents are central to both funding and valuation. They protect inventions that take years and significant capital to develop. They also show investors that a technical lead can be maintained.
The bottom line
The 2026 startup market is highly bifurcated between AI and everything else and suffers from a large exit bottleneck. Non-AI companies, in particular, need to utilize their assets wisely to survive. Startups that treat IP as a strategic business asset will be in a better position to raise capital, earn higher valuations and exit sooner.