Navigating US investor expectations in 2026: What UK founders need to know
For UK founders raising Series A and beyond, understanding this different investment culture is critical. While the UK provides strong early-stage support, many founders look west to access deeper capital pools and greater exit opportunities in a much larger market.
Why the US Holds Appeal
The UK has built strong early-stage momentum, supported by incentives and government programs, making it the world’s third-largest VC market. However, scaling beyond Series A remains challenging.
By contrast, the US dominates global venture capital, accounting for over $80 billion in investment in the first half of 2025; around 60 per cent of total deal value and 80 per cent of high-value rounds. With seven of the world’s top ten tech hubs, the US offers unparalleled access to capital, talent, and exit opportunities, making it the natural launchpad for scaling from Series B onward.
How the Investment Landscape Has Shifted
Between 2021 and 2023, the US market saw rapid capital deployment and high valuations. Today, however, we see tighter investor discipline. We expect the market will remain selective in 2026, emphasising:-
Focused Bets on Core Sectors
AI, data infrastructure, biotech, and platform-driven technologies currently have the bulk of investment attention. Roughly one-third of global VC funding in 2024 went to AI, an 80 per cent increase on 2023, and by mid-2025, AI deals matched the entirety of 2024 ($104.3 billion), indicating an accelerating trend. Mega-rounds and elite players dominate, creating in aggregate a top tier of private AI valuations nearing $1 trillion.
Governance and Reporting Maturity
Structured reporting, clean financials, and clear ownership are expected earlier in the investment cycle, with many of 2021-22’s unicorns struggling to justify valuations. Down rounds (raising new funding at a lower valuation) became common in 2023–25 as reality caught up with inflated prices.
Fewer Deals, Larger Cheques
For UK investors, deal activity fell, with Beauhurst tracking a 9.5 per cent year-on-year decline. Likewise, in the US, deal volumes are below the 2021 peak. However, median deal sizes jumped from $63 million to $115m, driven largely by late-stage funding rounds, primarily through capital concentration in fewer, but larger, deals. As we move into 2026, the venture market is transitioning from "growth at all costs" to fundamentals first approach.
IPO windows are reopening as rates ease and markets stabilise. Many mature tech and AI-driven firms delayed IPOs during 2025; these companies now form a deep pipeline for 2026.
How US Investor Expectations Have Changed with this Market Shift
As the US venture landscape becomes more selective and driven by fundamentals, investor expectations are shifting. For UK founders, understanding these structural and cultural differences and how they shape today’s market is key to unlocking the opportunities US investment offers.
Emphasis on Scale and Fund Maturity
The US’s more mature funds provide greater capital availability , enabling companies to scale faster and access more exit opportunities, with higher returns and greater VC capital allocation from institutional investors.
The Shift from “Growth at All Costs” Means a Higher Bar for Risk-Adjusted Judgement
US investors still, broadly speaking, have a more optimistic outlook that correlates with a higher risk appetite. Larger, faster investment amounts and quicker decision-making are still the norm, but scrutiny has increased, with investors prioritising clean financials and realistic, well-governed valuations.
Higher Expectations of Founder-Led Engagement and Local Strategy
The US investment community generally frowns upon the use of intermediaries or brokers and expects direct engagement from founders, placing strong emphasis on leadership quality and capability. Investors also favour ventures with a US foothold and a clear strategy for local market growth and partnerships.
With US companies dominating global stock market capitalisation (50.2per cent), a massive domestic economy, and lower expansion barriers, investors anticipate quicker returns; especially as exits and IPO windows gradually reopen.
The Rise of Ex-Operator Investors Means Higher Expectations
US fund managers do not typically come from pure financial backgrounds; many are former startup founders. To align with their mindset, UK founders must ensure their narratives emphasise market potential and scalability in the US.
Aligning familiar structures with US investors can address many of the investor differences, making negotiations and legalities simpler, and better demonstrating value and traction with US markets. The “Delaware Flip”, where a new US corporation exchanges its UK shares for the new entity, is a commonly used strategy.
This approach reassures investors with clean ownership, compatibility with US norms and potential tax benefits. Beyond structure, investors expect audit-ready books, detailed forecasts, and a credible US go-to-market strategy.
Align Culture and Communications to Win in 2026
Companies most likely to thrive in 2026 and beyond will be those that align structurally, culturally, and operationally with US norms and are ready for rigorous financial and technical validation, backed by deep market understanding.
By understanding these investor expectations now, founders can better position themselves for a strong raise and smooth expansion, as well as long-term success in the world’s largest, most competitive, venture market.
For more information on this or other related topics, email: malcolm.joy@frazierdeeter.com
