Key Takeaways
- • PitchBook projects 2026 as a record year for venture capital, with $726.9bn invested in startups across the first three quarters, but capital is concentrating in a small group of AI companies led by OpenAI and Anthropic.
- • Altimeter's Meghan Reynolds said VC fund net asset values have grown more than 100% year to date, compared with about 10% gains for public holdings and broadly flat performance across other private asset classes.
- • PitchBook reports that of 201 US companies it gave better-than-even odds of going public by the end of 2025, only 53 did, and just 58 are now considered likely to list within three years.
- • Public markets are cautious toward software companies that cannot show how they will withstand AI disruption, while the most highly valued AI companies may be too expensive for public investors to absorb.
- • GCV's prior analysis finds corporate-backed startups are more likely to achieve an exit, with strategic investors offering customers, distribution and technical expertise that matter as AI reshapes competitive advantage.
Summary
Venture capital is becoming increasingly K-shaped, according to a piece by Global Venturing drawing on discussion at the GCV Executive Leadership Forum. PitchBook data cited in the article shows $726.9bn invested in startups in the first three quarters of the year, a pace that could make this a record year. Much of that capital flows to a small group of companies led by OpenAI and Anthropic, leaving companies in other sectors competing for a smaller pool of funding. Fundraising has also become harder for venture funds outside the most sought-after AI themes.
AI is also changing how investors value companies, and may be eroding the value of existing portfolios. The IESE business school is examining this question in a study titled 'When AI Destroys Value: The Impact of Technological Disruption on Venture Capital Valuations.' Companies that once looked well positioned can face AI-enabled competitors, while perceived AI beneficiaries attract valuations that are increasingly hard to justify. Meghan Reynolds, a partner at Altimeter, said VC fund net asset values had grown by more than 100% year to date, versus roughly 10% for public holdings and broadly flat results for other private asset classes.
Rising private valuations are not translating readily into exits. According to PitchBook's report 'The IPO line has moved on,' of 201 US companies given better-than-even odds of going public by the end of 2025, only 53 did, and 58 are now considered likely to list in the next three years. The article reports that Anthropic and OpenAI are reportedly facing investor pressure to reduce their valuations. PitchBook considers 14,745 other US venture-backed businesses unlikely to go public. Trade sales remain important: SpaceX's $60bn purchase of Cursor earlier this year shows M&A can generate sizeable exits, although the article concludes that venture's power law is concentrating value in an increasingly narrow group of companies.
The article argues strategic investors may hold an advantage. GCV's previous analysis found corporate-backed startups are more likely to exit, because corporate investors can provide customers, suppliers, distribution, technical expertise and routes into established markets. Those capabilities become more valuable as companies must adapt business models or demonstrate commercial traction. For corporate investors, the opportunity is to help portfolio companies navigate a market in which existing strengths may no longer guarantee future value.
AI is also changing how investors value companies, and may be eroding the value of existing portfolios. The IESE business school is examining this question in a study titled 'When AI Destroys Value: The Impact of Technological Disruption on Venture Capital Valuations.' Companies that once looked well positioned can face AI-enabled competitors, while perceived AI beneficiaries attract valuations that are increasingly hard to justify. Meghan Reynolds, a partner at Altimeter, said VC fund net asset values had grown by more than 100% year to date, versus roughly 10% for public holdings and broadly flat results for other private asset classes.
Rising private valuations are not translating readily into exits. According to PitchBook's report 'The IPO line has moved on,' of 201 US companies given better-than-even odds of going public by the end of 2025, only 53 did, and 58 are now considered likely to list in the next three years. The article reports that Anthropic and OpenAI are reportedly facing investor pressure to reduce their valuations. PitchBook considers 14,745 other US venture-backed businesses unlikely to go public. Trade sales remain important: SpaceX's $60bn purchase of Cursor earlier this year shows M&A can generate sizeable exits, although the article concludes that venture's power law is concentrating value in an increasingly narrow group of companies.
The article argues strategic investors may hold an advantage. GCV's previous analysis found corporate-backed startups are more likely to exit, because corporate investors can provide customers, suppliers, distribution, technical expertise and routes into established markets. Those capabilities become more valuable as companies must adapt business models or demonstrate commercial traction. For corporate investors, the opportunity is to help portfolio companies navigate a market in which existing strengths may no longer guarantee future value.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.