Crunchbase reported that global venture deployment hit roughly $300 billion in Q1 2026, with $188 billion of that, about 65%, concentrated in four companies: OpenAI, Anthropic, xAI and Anduril Industries.
AI’s share of venture funding climbed to 80% this quarter, up from 55% a year ago. The deployment is real. The liquidity question behind it is the one founders should be paying attention to.
In 2025, Crunchbase counted roughly 2,300 venture-backed acquisitions against just 65 IPOs. In aggregate, the LPs sitting behind every venture fund have been in net-negative cash flow territory since 2022. Record deployment in Q1 doesn’t change the math at the LP level, and that pressure is reshaping every term sheet, follow-on decision and board conversation in venture right now.
Know what’s actually driving the firm across the table
When a partner walks you through their thesis, they’re telling you a story about your market; rarely are they telling you a story about their fund. That second story determines whether they can write your bridge in 18 months, whether they’ll fight for pro rata in your Series B, and whether their behavior in the next downturn looks like patience or anxiety.
LPs are demanding cash back. Paper markups aren’t enough. Some firms are responding well, consolidating into their best companies and being deliberate about new commitments while others are pretending it’s still 2021. Founders should know which type they’re sitting across from before signing anything.
Ask the questions founders rarely ask
Three reference calls with portfolio CEOs used to be enough due diligence on a VC. Not anymore.
Ask what vintage the partner’s current fund is and how much dry powder is left. Ask how many of their 2018 through 2020 companies have produced realized returns rather than paper markups.
Ask whether their LPs have been pushing for GP-led secondaries. If the answer is yes, the firm is operating under a cash-flow constraint that will show up in your boardroom. These aren’t rude questions. They’re the same ones serious LPs are asking that partner this quarter, and high-quality firms welcome the conversation.
Build your buyer relationships now
If you’re raising in 2026, you’re statistically far more likely to get acquired than to ring the bell at the Nasdaq. Q1 2026 alone produced $56.6 billion in venture-backed M&A, the third-busiest quarter since 2022. Of the 21 venture-backed exits over $1 billion globally last quarter, only four happened in the U.S. The exit window for American founders is narrower than the headline funding numbers suggest.
Smart founders design for that reality from Series A. They know which platform companies have an active corporate development team. They build product surface area that maps cleanly into someone else’s stack. They cultivate executive relationships at the most likely acquirers years before any sale conversation, so when one starts naturally the introduction is already there.
Capital is plentiful. Discipline is what separates outcomes.
Every dollar concentrated into the four AI mega-rounds is a dollar that hasn’t returned anything to LPs yet. Founders who understand the LP-to-GP-to-startup chain end up with better partners, smarter terms and companies built for more than one path to a great outcome.
As the co-founder and managing partner of MGV, Marc Schröder is committed to establishing MGV as the premier venture firm for world-class tech entrepreneurs to accelerate their visions. Under Schröder’s stewardship, MGV has swiftly ascended to a top-quartile firm, surpassing the performance of 95% of venture funds. The performance of MGV is driven by Schröder’s unique approach to venture investing — that providing intensive sales training, devising robust fundraising strategies and securing follow-on investments is the best way to support founders and drive the deepest return for investors. Business Insider has recognized him as one of the Top 100 global seed investors, and his perspectives are published regularly in Crunchbase News and other leading publications.
Related reading:
- What The Record Venture Funding Quarter Actually Means For Your Startup’s Fundraise
- Q1 2026 Shatters Venture Funding Records As AI Boom Pushes Startup Investment To $300B
