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Key Takeaways:

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• Healthy market and good time to fundraise
  

• Deal volume near post-pandemic highs
  

• AI companies continue to raise at faster velocity and level
  

• Recent rise in private rounds valued over $10 Billion in valuation
  

• Investor demand remains for strong core business models

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Download the summary report here.

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Venture capital deals in the valuation range of $1 Billion to $10 Billion in Q2 2026 had a median markup of 2.3x. This means that if a company’s prior round was raised at a $1 Billion valuation, then a subsequent equity financing in Q2 would have been raised at a $2.3 Billion valuation. Deal volume and markups have begun to normalize between the levels seen in the ZIRP era and the lows of 2023. Much of this activity is being driven by AI companies, as evidenced by the 3.4x median markup within that subset. This is a healthy market and a good time for founders to contemplate their next raise.

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Founders often target a new round every 12 to 24 months as their business grows, giving them time to build their product and customer base and hit milestones before their next fundraise. We are currently in a healthy market with a median of 12 months between rounds. It is worth nothing that AI companies had a median of 9 months between rounds, meaning a full year has yet to transpire before the median 3.4x markup.

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Companies are increasingly raising rounds shortly after their previous round closes. The past 5 quarters have seen at least 7 companies raise a round less than 6 months after the prior round, which is still below ZIRP-era highs but above historical trends.

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There has been a spike in dollars deployed to companies valued at over $10 Billion with the majority of capital in this subset being raised by OpenAI, Anthropic, and xAI. The high amount of capital concentration in a few private market companies within a short period of time is unprecedented and displays market enthusiasm for frontier model companies.

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Even while omitting OpenAI, Anthropic, and xAI, the amount of equity capital in the late stage venture environment of $10+ Billion valuations remains elevated. Investors seek to position themselves to back the potential winners in a new era of technological development as more growth is captured in the private markets and earlier in company lifecycles. The amount of capital being allocated to $10+ Billion valuations dwarfs the prior periods even when compared to the elevated market era of 2020-2021.

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The median deal size for deals above $10+ Billion in valuation has increased by ~3.5x since the ZIRP era, from $682 Million to $2.4 Billion per deal. Not only are more $10+ Billion valuations occurring but there is also an increased amount of capital in these rounds. The level of capital intensity being absorbed in the private markets was once thought to be an anomaly but has become a regular occurrence in recent years.

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Traditional VC firms are driving the spike in deal activity above the $10 Billion valuation threshold. Historically, such valuation levels would indicate these deals being led by a larger asset manager or mutual fund. The latter firms still participate in such rounds, yet it is notable the range in which venture capital investing is now extending in the private markets to valuations well above many public market competitors.

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The market conditions in Q1 offer a number of considerations for Founders:

• This is a healthy venture capital market and good time to fundraise
  
  
• The market for AI deals remains particularly elevated
  
  
• Investors focus on the potential impact of AI disruption, both how your company may drive the disruptions and how it could also be disrupted by them
  
  
• Investors are also weary of the "Nth" company in the same space. Certain themes are overcrowded and potentially overfunded
  
  
• A small number of household names are raising quickly, often at healthy markups
  
  
• Articulate your strong core business model (with data)

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About The Market Conditions Update

‍The Friends & Family Capital Market Conditions Update features metrics that we track internally on companies raising capital at valuations ranging from $1 Billion to $10 Billion.

This is one of the assets we review with founders, CEOs, and CFOs in our network as they prepare for their growth rounds.