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Venture capital is unlikely to be replaced by one new model. The more plausible shift is a rebalancing: AI attracting an unusually large share of funding, more investment coming from outside traditional VC firms, fewer new funds getting established, and more pressure to find liquidity while companies remain private. Tokenized markets could alter the infrastructure, but they are still a possibility under discussion—not a settled replacement for today’s system.
Why a record year can still signal strain
U.S. venture dealmaking looked strong by one measure in 2025: the National Venture Capital Association’s 2026 Yearbook, using PitchBook data, counted $320 billion across 15,352 deals, with deal value up 51% year over year and the second-highest total on record. But large deal values do not mean capital was broadly accessible or that investors could readily get their money back. A small number of very large rounds and concentrated fundraising shaped the headline.
That tension is central to the decade ahead. Venture capital depends on a cycle: funds invest in private companies, some companies exit, and proceeds return to investors who can then commit capital to new funds. The World Economic Forum’s May 2026 report, developed with Stanford GSB’s Venture Capital Initiative, identifies slowing capital recycling as one pressure on the industry. If exits lag investment for long periods, both investors and fund managers may have less flexibility to back new companies.
How AI could reshape venture investing
Funding is concentrating in AI
AI accounted for 65.4% of U.S. venture deal value in 2025, or $222 billion, according to NVCA’s 2026 Yearbook and its PitchBook data. The Yearbook says AI’s share was 10% a decade earlier. Separately, Carta reported that over 60% of the venture capital raised by companies on its platform in Q1 2026 went to AI, with foundational-model companies driving a large portion. These figures point in the same direction, but they measure different datasets and periods; neither should be read as a market-wide measure of what a typical startup can raise.
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The concentration is especially visible in the largest deals. In 2025, 487 U.S. deals of at least $100 million represented 3.2% of deal count but 67% of deal value, according to NVCA/PitchBook. The top five companies raised nearly $60 billion collectively. Those numbers help explain why a rising total can coexist with intense competition for funding among companies outside the biggest rounds.
What that may mean over the next decade
As an inference, rather than a settled forecast, AI’s share of funding could affect what venture firms prioritize, the size of rounds, competition for computing infrastructure, and the distribution of returns. The WEF identifies AI’s reshaping of venture economics as a structural pressure, but the evidence does not establish which business models or investors will ultimately win. For founders, workers, and individual investors watching the sector, the useful distinction is between the growth of AI financing and the still-uncertain returns that financing may produce.
Who supplies venture capital may become more varied
Traditional venture firms are no longer the only important participants in large U.S. deals. NVCA/PitchBook reports that nontraditional investors—including hedge funds, sovereign wealth funds, corporate strategics, and endowments—participated in roughly 30% of U.S. venture deals in 2025 and supplied 83% of investment value. Those categories encompass organizations with differing mandates; the figure does not mean they all invest for the same reasons or on the same terms.
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This mix can make venture financing more collaborative and more competitive at once. A corporate investor may care about strategic access as well as financial return; a large institutional investor may have a different time horizon or allocation process from a conventional venture fund. NVCA President and CEO Bobby Franklin described this as a “team sport,” noting that investors may compete or collaborate with corporate investors, crossover funds, sovereign wealth funds, or government. The practical change is that a company’s financing may involve a broader set of priorities and counterparties than a traditional VC-only round.
Why raising a venture fund may get harder for new managers
In 2025, traditional U.S. VC fundraising totaled $67 billion across 585 funds, according to NVCA/PitchBook. The ten largest funds took in $22 billion, or 32.9% of that capital. Meanwhile, 101 first-time funds were formed, down 77.9% from 457 in 2021. These figures show concentration and a sharp decline in new fund formation; they do not prove that fund concentration alone caused any particular startup to receive less funding.
If fewer new managers can raise funds, the industry may have fewer paths for investors to back emerging firms, specialist strategies, or less-established networks. That is a plausible implication, not a guaranteed outcome: established managers can also finance new sectors, and the data do not determine which companies will benefit. For limited partners deciding where to commit capital, the balance between established funds and newer managers may become a more consequential choice.
Liquidity is changing alongside the private-company timeline
U.S. venture-backed exits totaled $217.1 billion across 1,463 deals in 2025, more than twice the prior year, according to NVCA/PitchBook. Yet NVCA says that total was insufficient to clear a growing backlog of private companies. Its figures also counted 859 active unicorns valued at $4.34 trillion, while only 30–40 unicorns exited during the year. These are reported 2025 conditions, not a projection of future exit rates.
With more value held in private companies, secondary transactions and tender offers are increasingly important liquidity mechanisms for some companies, employees, and investors. NVCA/PitchBook put U.S. secondary-market volume above $100 billion in 2025. Carta’s Q1 2026 analysis also describes secondaries and tender offers as important in its company dataset, while public listings are returning selectively. A secondary sale can provide liquidity to selected shareholders without being the same as a company sale or public listing, and it does not necessarily return money to a fund’s limited partners.
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1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minute| Route | What it generally means | What to check |
|---|---|---|
| Private secondary | Existing shares change hands privately; it may provide liquidity to selected shareholders without a company-wide exit. | Who is permitted to sell, who buys, and whether proceeds go to individuals or a fund. |
| Tender offer | A company-arranged opportunity for eligible shareholders to sell shares under specified terms. | Eligibility, amount available for sale, price, and any company or investor restrictions. |
| IPO | A company lists shares on a public market, potentially creating a route to public trading. | Listing terms, lockups or other limits, and whether shares can actually be sold at a given time. |
| Acquisition | Another company buys the business or its assets; the transaction may provide proceeds to shareholders under its terms. | Deal structure, which shareholders receive proceeds, and how consideration is distributed. |
The sources cited here do not establish a comparable ranking of these routes by how much liquidity they provide, what information or governance obligations apply, or how often they return capital to limited partners. Those details depend on the transaction. The distinction matters because “an exit” for a company, liquidity for an employee, and cash returned to a venture fund are not interchangeable outcomes.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Could tokenization change the infrastructure?
Tokenization could change how private-market interests are recorded, transferred, or serviced, but it is not yet an established substitute for existing fund structures or securities rules. In a March 2026 CAIA Association member survey, 29% of respondents selected tokenized private markets and 24/7 exchanges as the development most likely to alter capital allocation, compared with 28% who selected semi-liquid and evergreen structures. These are CAIA member views, not measured market outcomes.
CAIA’s Aaron Filbeck said tokenization “could shift the focus from building better fund structures to rebuilding the infrastructure beneath them.” The possible appeal is operational: distributed ledgers might support trading, proxy voting, dividend handling, or shareholder communications. In a December 2025 speech, SEC Chair Paul Atkins discussed such potential while emphasizing compliant pathways and investor protections. He said a thoughtful, time-limited and transparent exemptive framework with strong protections could allow on-chain models to develop. That was the Chair’s policy view, not a binding rule or a determination that tokenized private securities have displaced current systems.
So the structural question is not simply whether a fund can issue a token. It is whether ownership, transfers, disclosure, investor rights, and safeguards can work reliably within applicable law. CAIA’s survey signals interest; it does not settle those practical and regulatory questions.
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Geography, governance, and skills may shape the outcome
The WEF’s May 2026 report points to uneven global distribution of scale-ups alongside slowing capital recycling and AI’s effect on venture economics. That frames an important geographic question: whether companies outside the best-funded ecosystems can turn early investment into businesses that scale. The public summary does not quantify a single future distribution or establish that one region will gain at another’s expense.
Investment organizations may also need to adapt how they assess technology, geopolitical exposure, and new financing structures. CAIA’s 2026 report says only 20% of its surveyed respondents were very confident their organization could foster the innovation needed to remain competitive over the next decade. That is a measure of confidence among CAIA respondents, not a finding about every investment organization or workforce.
What a reasonable decade outlook looks like
The evidence points to several forces that could change venture capital without replacing it: AI may keep drawing a disproportionate share of funding; capital may continue to come from a wider set of institutions; fund formation may remain difficult for new managers; and more liquidity may be sought before a full public listing or acquisition. Tokenization could affect market plumbing if legal and investor-protection frameworks develop, but that path remains uncertain.
These are conditional implications, not a prediction that one model will dominate by a particular year. A practical way to follow the shift is to watch whether deal value remains concentrated in a small set of rounds, whether exits and distributions improve capital recycling, whether first-time fund formation recovers, and whether tokenized-market rules move from proposals and policy discussion into established compliant practice. The next decade’s defining change may be the interaction among these forces rather than a single new form of venture capital.
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