What Founders Can Expect in 2026

Insights from Connecticut Innovations’ Investment Team

A new year is right around the corner, and if you’re gearing up to raise capital, you’re likely wondering what 2026 has in store. What’s changing? What still matters? And where are the real opportunities? To help answer these questions, we asked three members of Connecticut Innovations’ investment team to share what they’re seeing across the ecosystem. Their expertise spans fintech, insurtech, life sciences and climate tech, providing a rare cross-sector view of the opportunities and challenges founders will encounter.

The Big Opportunities: Power, Resilience, Life Sciences and the “Picks and Shovels” of AI

Across the board, CI’s investors expect the next year to reward startups solving real, structural problems. Konstantine Drakonakis, a managing director of investments who focuses on climate tech, sees a wave of opportunity driven by rising energy costs, extreme weather and the push for reshoring and domestic manufacturing. “Companies building solutions in the power generation, resilience and supply chain sectors are positioned for significant traction in the current market,” he said.

Agricultural forecasting, along with technologies that model and mitigate climate extremes like flood and fire, are also nearing breakout moments. “Startups working on the big problems that ultimately drive economic stability” are poised to matter a lot more by 2026, Drakonakis said.

Life sciences remain steady, but capital shifts toward lower risk.

Daniel Wagner, a senior managing director focused on investment opportunities in healthcare and life sciences, notes that while the sector remains stable, investor appetites have shifted. “Some modalities, like cell and gene therapy, are facing tougher paths; others, such as antibody-drug conjugates, or ADCs, are surging,” he said, adding that, while funding is available, it favors later-stage companies and shared-risk models. “Early seed rounds are happening, but the Series A and B crunch is real. I’m hoping the market continues to open, allowing dollars to flow downstream a little.”

AI will be everywhere—but the winners will be the enablers.

Peter Longo, a senior managing director of investments at CI, is looking closely at the “picks and shovels” of the AI boom: the infrastructure, tools and efficiency platforms that make widespread AI adoption possible. From fintech to operations to back-office automation, he expects the biggest value creation to come not from headline-grabbing generative models, but from the systems that help businesses put AI to work. “I’m excited about the opportunity,” he said. “There will be huge efficiencies brought forth by such solutions, and the companies that bring them forward have the potential to be real winners.”

What the Best Founders Will Have in Common

Venture capital investors often say the teams they invest in are just as important—if not more important—than the technology. Across sectors, CI’s investors are leaning toward leaders who have a vision for solving the biggest problems that will have the greatest impact.

“For founders, focusing first and foremost on solving real customer pain points is key,” said Drakonakis. After that, it comes down to economics. “In a tough macroeconomy, where businesses are focused on fiscal discipline and ROI, it’s critical that their solutions pencil out,” he said.

Wagner said CI’s team recognizes that not all founders look the same, though repeat founders remain desirable. He added, “In ecosystems like Connecticut, investors need to be flexible fishing in a small pond.”

Longo appreciates founders who actively seek input, listen to the advice they’re given and remain flexible. “I like founders who understand their limitations and have the courage to pivot, which all companies eventually have to do,” he said.

The 2026 Funding Landscape: Tough, Selective and Shaped by Uncertainty

CI’s team’s consensus about 2026: capital will flow, but more cautiously.

Drakonakis believes venture activity will remain cooler than the boom years of 2020–2022. “I expect the downturn to continue until there is more macroeconomic stability and investor risk appetite increases,” he said, adding that while political and regulatory shifts will always shape where money goes, CI deliberately avoids companies that depend on regulatory or tax incentives to scale.

Longo expects 2026 to remain difficult for seed and early-stage tech companies. “VCs will largely prioritize funding their existing portfolio at the expense of investing in new companies, and although the IPO window may reopen, the huge backlog of companies waiting for exits will constrain the market,” he said.

Wagner sees funding availability tied closely to market volatility. When economic swings occur, he says, investors “sit and wait, or they feed their own portfolios.” This leads to longer timelines and fewer new deals.

In short: capital is available, but only for startups with discipline, traction and clear strategic value.

“Keep your burn rate as low as you can, continue to build out your referenceable customer base, dig in for another challenging fund-raising year, but continue to move forward."

CI’s investment team was aligned in their guidance for founders headed into the new year: be capital efficient, raise earlier and more than you think you need, and build a strong customer base.

“Founders need to have focused and efficient business operations and sustainable growth plans,” said Drakonakis. “This means being conscientious stewards of capital. It also means raising more than you might like to or want to when you can, so the business has a long runway.”

“Be capital efficient and always be raising, pitching and networking,” said Wagner.

“Keep your burn rate as low as you can, continue to build out your referenceable customer base, dig in for another challenging fund-raising year, but continue to move forward,” added Longo.

Final Thoughts

Drakonakis anticipates “significant consolidation” in climate tech over the next few years with ample M&A opportunities—a trend he believes will ultimately strengthen the sector long term if startups can prove they are building products with strategic and accretive value.

Wagner adds that founders and investors alike should remember that “change is always coming,” and that both groups will need to be creative and adaptable.

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