Q1 2026 Venture Beacon: Key VC Market Trends

This edition of Fenwick’s Venture Beacon looks back at Q1 2026 and delivers a detailed, data-driven look at early- and late-stage deal activity, valuation trends, and structural shifts in the venture ecosystem.

Access the full report

Select Highlights from the Q1 2026 Venture Beacon:

• Venture fundraising activity continued to recover in 2025 and into Q1 2026. Total capital raised increased meaningfully from 2023 lows, continuing the broader recovery trend that began in 2024. Series D+ financings continued to represent a meaningful portion of total dollars invested, reflecting continued strength in later-stage financings. 
• Valuations continued trending upward across financing stages. Median Seed and Series A pre-money valuations reached record highs in 2025, while Series B, Series C, and Series D+ valuations continued rebounding from the declines experienced in 2022 and 2023. Year-over-year valuation growth remained positive across all major financing stages in both 2024 and 2025. 
• The gap between top-performing companies and the broader market widened. The spread between median and top-quartile companies expanded further in 2025. At the seed stage, the gap between the 50^th and 90^th percentile valuations increased materially. Series A financings showed a similar trend, with the top 90th percentile valuations experiencing significant growth relative to 75^th percentile and below. 
• Fundraising conditions showed continued signs of stabilization. The percentage of both early-stage and later-stage down rounds declined entering 2026, while investor-friendly deal terms such as participating preferred structures, cumulative dividends, and greater-than-1x liquidation preferences remained rare. At the same time, the median time between Seed and Series A financings remained elevated compared to historical norms. 
• AI companies continued to capture an increasing share of venture capital. A record 61% of all venture dollars raised in Q1 2026 went to AI companies, continuing a multi-quarter upward trend. AI companies also outperformed broader industry benchmarks on both round size and valuation metrics at the Seed and Series A stages. 
• Fundraising benchmarks continued to vary significantly by industry. Hardware, crypto/web3, gaming, and AI-related companies generally recorded some of the largest median round sizes and valuations, while healthcare, biotech, consumer, and edtech companies remained comparatively more moderate by those metrics. 

Since 2002, Fenwick has published a quarterly venture capital report, providing the global entrepreneurial and venture community with meaningful insights into the terms and trends shaping venture financings in Silicon Valley and beyond. We are excited to continue this work in partnership with Carta, combining our legal expertise with Carta's robust market data to deliver richer, more comprehensive analysis with each edition.