No Crystal Ball Required: VC 2026

There is no crystal ball. Human action arises from trillions of independent decisions — far too complex to simulate — ideally made voluntarily and coordinated through a free price system.

Still, forecasting is inherent to investing: capital allocation ultimately reflects an investor’s vision of the future.

Long-term investors are unapologetically optimistic. With that perspective, we are highly confident in one key prediction for US VC in 2026.

The most important price in the economy is the price of money. With the creation of the Fed, that price ceased to be naturally discovered by markets and became centrally dictated by a politburo-like group of anointed bureaucrats.

As expected, politics and entrenched establishment forces took control of this no-skin-in-the-game assembly (even if that were not the case, the outcome would still be guesswork, as evidenced by the FOMC’s frequent dissents — without even mentioning the Fed’s abyssal track record, under whose tutelage the dollar has lost over 97% of its purchasing power).

In May, a new chair will take office, and there is little doubt that the dovish pivot initiated in late 2025 will gain further traction, as it aligns with the executive branch’s wishes.

Fiscal reality reinforces this trajectory: with over $100B per month now accruing in interest expense, the math alone argues for rate cuts, largely independent of the economy’s temperature. Meanwhile, the “dollar milkshake” remains fully engaged — now reinforced by stablecoins, arguably the most consequential financial innovation of 2025, channeling incremental global savings into T-bills.

Nearly $8T now sits in money-market funds, and as rates fall, this capital will inevitably rotate into equities and other asset classes, including VC. At the same time some QE is knocking on the door.

Finally, lower interest rates have an outsized impact on tech valuations, as much of their NPV lies in the terminal value. Expect then higher tech valuations — and, in turn, a renewed wave of IPOs.

Conclusion

To borrow a Brazilian expression, we see this 2026 VC prediction as “papaya in honey”. Indeed, four of our portfolio companies — Kraken, Lambda, Cerebras, and Consensys — have already announced plans to IPO in the first half of 2026.

All “astrological” signs point to 2026 shaping up to be an exceptional year for tech IPOs.