This article summarizes the main VC trends that have caught the attention of the IPEM Community team these past few months, and will help shape the IPEM Global 2026 event program.
In our conversations with VC investors, the verdict is that venture capital is moving into a phase defined by heightened selectivity and more frequent liquidity events, that are changing how LPs approach the asset class.
The 1% Club
Historical evidence shows that the top one percent of companies drive the lion’s share of VC returns. How LPs consistently access that elite tier is incredibly difficult yet it remains central to decision-making. It's one reason why capital is concentrating among top-tier managers who demonstrate clear paths to identifying and backing these outlier companies amid the lingering downturn of 2021/22 vintages.
Allocators are considering whether to focus on backing serial founders with a proven track record, or funds that can optimise portfolio management, providing liquidity throughout an investment lifecycle.
Given persistent distribution delays, limited partners now prioritise GPs with rigorous underwriting discipline and proven value creation, while acknowledging that venture remains a higher-risk asset class reliant on the power law of outsized returns from small number of assets.
AI is scrambling the software investment landscape
VC conversations have been dominated by what disciplined investing looks like when AI is rewriting the rules of software.
A growth equity partner observes that the market has reset toward fundamentals after years of excess, and that deploying capital with discipline has never mattered more precisely because AI is making it harder to distinguish durable business models from those that will be disrupted.
A founding partner at a tech fund argues that the question is no longer whether to adapt but what venture's next competitive moat looks like — "AI is changing startup physics."
A VC partner focused on early-stage software notes that companies can now reach scale faster, with less capital and fewer employees, fundamentally changing growth dynamics and return potential.
"AI is poised to create an entirely new paradigm across the full value chain of investment funds — from fundraising and deal sourcing, to deal analysis, investment selection and portfolio support, all the way through to exit. Every stage stands to be disrupted and reimagined. The question is no longer whether AI will reshape the industry, but how quickly firms can adapt before the gap between early movers and the rest becomes structural."
General Partner, European early-stage VC firm
Secondaries become a structural lifeline
The prolonged slowdown in IPO and M&A activity requires a shift away from the single liquidity event mindset. Secondaries have evolved from a niche instrument into a core liquidity tool - the $106bn of US VC secondary transactions last year is now on par with the two traditional exit channels.
This transformation is reshaping what LPs expect from VC firms and how GPs construct their investment theses, prioritising multi-exit strategy sophistication over reliance on traditional IPOs.
European VC is facing a DPI problem that many describe as structural rather than temporary. A liquidity specialist notes that DPI is being delayed and holding periods expanding, with secondaries becoming the primary mechanism for generating returns for both GPs and LPs.
A managing partner at an evergreen-structured fund argues the traditional closed-end fund lifecycle is itself part of the problem — the LP community is grappling with liquidity constraints that the standard model was not designed to resolve.
"The LP community is grappling with liquidity constraints and a growing sense that the 10-year closed-end model is poorly suited to the transitions ahead."
Founder & CEO, VC fund
Many have flagged that only 9% of 2021 vintage funds had generated any DPI after three years, versus 25% of 2017 vintage funds at the same stage.
Evolving LP-GP Partnership
The trend of allocating more capital with fewer managers is part of a wider private capital trend, and in VC it reflects a deeper evolution toward active partnership.
What an LP wants from this partnership depends on their long-term goals. Corporates want strategic value, access to innovation, and business relationships. Family offices want a seat at the table, proximity to innovation, and visibility on deals. Sovereigns want to develop ecosystems that create jobs and generate economic impact.
This diversification of LP aspirations forces VCs to tailor solutions across a heterogeneous base, articulating a differentiated edge in sector, stage, or geography while delivering customised value beyond capital.
A new playbook?
As secondaries gain prominence and LP expectations diversify, the venture model is shifting.
Operational, hands-on support takes on greater importance relative to private equity, as managers must map growth expectations clearly and factor AI disruption into startup business models.
What works in LP–GP relationships over this longer road to liquidity may matter as much as individual investment decisions.
The 2026 venture playbook must integrate sophisticated liquidity planning from day one, recognising that secondaries are foundational to returns in a market where companies stay private longer and traditional exits remain constrained.
Defence and sovereignty are defining new investment themes
Several VC players flag a significant shift in where capital conviction is building. Geopolitical tension and energy insecurity have made defence, digital sovereignty and critical infrastructure compelling investment themes in a way they were not three years ago.
"Europe has the talent, research and innovation — but lacks growth capital to scale globally. This creates a paradox: world-class startups, but weaker global outcomes. Closing the gap is not just economic — it's about technological sovereignty and strategic control."
Managing Partner, European growth capital firm
A partner leading a European sovereignty growth fund describes the past 18 months as pivotal for this reason.
Meanwhile, a deep tech fund manager notes that AI, space, robotics and dual-use systems are now sitting at the intersection of private capital and national security in ways that are reshaping both deal structures and LP appetite.
"92% of European data is currently hosted on American clouds, and roughly 80% of corporate software and cloud spending in Europe goes to American providers. In the current geopolitical context, this represents a major risk — and a major opportunity for European capital." Partner, European technology VC
A founding partner at a pan-European deep tech fund argues this is not a short-term trend: "the convergence of energy insecurity and industrial competitiveness in Europe is a generational investment opportunity."
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