[Skip to content](https://www.hubspot.com#main-content) [](https://www.hubspot.com/startups) - [Resources](https://www.hubspot.com/startups/resources) Show submenu for Resources - [Fundraising](https://www.hubspot.com/startups/fundraising) - [Sales & Marketing](https://www.hubspot.com/startups/sales-and-marketing) - [AI Tech & Tips](https://www.hubspot.com/startups/ai) - [Tech Stack Guide](https://www.hubspot.com/startups/tech-stacks) - [Founder & VC Insights](https://www.hubspot.com/startups/scaling-smarter) - [Podcast](https://www.hubspot.com/startups/podcast) - [Stories](https://www.hubspot.com/startups/stories) Show submenu for Stories - [Digital Magazine](https://www.hubspot.com/startups/magazine) - [DocuSeries](https://www.hubspot.com/startups/docuseries) - [Case Studies](https://www.hubspot.com/startups/stories/customers) - [Community](https://www.hubspot.com/startups/community) - [Partner](https://www.hubspot.com/startups/partners) - [Apply Now](https://app.hubspot.com/signup-hubspot/hubspot-for-startups) - [Resources](https://www.hubspot.com/startups/resources) Show submenu for Resources - [Fundraising](https://www.hubspot.com/startups/fundraising) - [Sales & Marketing](https://www.hubspot.com/startups/sales-and-marketing) - [AI Tech & Tips](https://www.hubspot.com/startups/ai) - [Tech Stack Guide](https://www.hubspot.com/startups/tech-stacks) - [Founder & VC Insights](https://www.hubspot.com/startups/scaling-smarter) - [Podcast](https://www.hubspot.com/startups/podcast) - [Stories](https://www.hubspot.com/startups/stories) Show submenu for Stories - [Digital Magazine](https://www.hubspot.com/startups/magazine) - [DocuSeries](https://www.hubspot.com/startups/docuseries) - [Case Studies](https://www.hubspot.com/startups/stories/customers) - [Community](https://www.hubspot.com/startups/community) - [Partner](https://www.hubspot.com/startups/partners) - [Apply Now](https://app.hubspot.com/signup-hubspot/hubspot-for-startups) [HSFS Home](https://www.hubspot.com/startups) / [Startup Trends](https://www.hubspot.com/startups/resources/tag/startup-trends) / 28 Startup Trends to Watch in 2026 [Startup Trends](https://www.hubspot.com/startups/resources/tag/startup-trends) # 28 Startup Trends to Watch in 2026  [HubSpot for StartupsYour go-to destination for education, inspiration, and resources for startup founders.](https://www.hubspot.com/startups/resources/author/hubspot-for-startups) / Jan 4, 2023 [](https://www.facebook.com/share.php?u=https%3A%2F%2Fwww.hubspot.com%2Fstartups%2Fresources%2Fstartup-trends%3Futm_medium%3Dsocial%26utm_source%3Dfacebook) [](http://www.linkedin.com/shareArticle?mini=true) [](https://twitter.com/intent/tweet?original_referer=https%3A%2F%2Fwww.hubspot.com%2Fstartups%2Fresources%2Fstartup-trends%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&text=) [](mailto:?subject=Check%20out%20https%3A%2F%2Fwww.hubspot.com%2Fstartups%2Fresources%2Fstartup-trends%3Futm_medium%3Dsocial%26utm_source%3Demail%20&body=Check%20out%20https%3A%2F%2Fwww.hubspot.com%2Fstartups%2Fresources%2Fstartup-trends%3Futm_medium%3Dsocial%26utm_source%3Demail) *Last updated July 2026* Startups are always looking for new and innovative trends to help them stay ahead of the curve. In 2026, a few trends will be worth watching closely. First thing’s first: startups need to have their thumb on the pulse of the fundraising world. Mergers and acquisitions continue to see steady growth, but several startups are also exiting via high-value IPOs this year. And as for venture capital, deal values are growing rapidly, but the actual number of deals is shrinking. While fewer startups are closing deals, they are raising record (and near-record) funding rounds. Because of this, startups need to be more mindful about what industries are grabbing investor attention. AI isn’t enough; vertical AI is the future, and investors are looking for domain experts. Then, there’s trends within startups themselves. From remote work to wellness initiatives, employees are looking for more balance, even in the startup space, which has not always been known for work/life balance. Beyond the workplace, we’re also covering today’s startup costs, geographical trends, exits, and more. Here are the 28 major startup trends to watch through 2026 and into next year. ## TL;DR: What are the biggest startup trends for 2026? - __Vertical AI is where investor dollars are flowing:__ Generic AI is no longer a differentiator; niche AI applications are projected to reach $74.5B by 2033 and are attracting the lion’s share of startup funding. - __Defense tech, biotech, and fintech are the hottest non-AI sectors__: Defense tech hit a record $49.1B in funding in 2025, biotech is projected to surpass $2T in 2026, and fintech is on track for a $1.76T market value by 2034. - __M&A is on pace for a record year__: Mergers and acquisitions totaled $861B in Q1 2026 alone, making consolidation a dominant exit strategy. - __Startup team culture is undergoing a reset__: Employees now rank work/life balance above salary, and startups are responding with remote-first policies, wellness initiatives, and upskilling programs to attract and retain top talent. - __Where you build matters more than ever:__ Beyond the U.S., startup ecosystems in the UAE (445% jump in Dubai VC investment), the U.K., and Canada are growing rapidly, giving founders more options for where to launch and scale. ## Funding trends In the world of startups, financing is everything. Staying ahead of capital funding trends can make or break your business. While securing venture capital is still a common goal for today’s startups, other fundraising strategies that may help founders maintain full company ownership are also gaining footing. ### VCs are funding higher amounts across fewer deals [Venture capital fundraising trends for 2026](https://www.hubspot.com/startups/fundraising/vc-fundraising-trends) show that while the total cost of VC investments is rising, the money is being distributed across a fewer number of startups. [According to Pitchbook](https://pitchbook.com/news/reports/q4-2025-global-vc-first-look), global VC funding reached $512.6B across 37,745 deals. This is compared to $391.9B across 42,666 deals in 2024 and $368B across 45,852 deals in 2023. The result is a barbell: megadeals with most funding goes toward bigger startups with high valuations, and much of the remaining funding going toward disruptive, early-stage startups with founders that have deep domain knowledge and solid, provable traction. ### Crowdfunding Crowdfunding has been on the rise in recent years, and it will only become more popular as traditional sources of startup funding dry up. Platforms like [Kickstarter](https://www.kickstarter.com/), [Indiegogo](https://www.indiegogo.com/), and [StartEngine](https://www.startengine.com/) have already disrupted the startup ecosystem by giving early-stage companies a way to raise money from a large group of small investors. Whereas Kickstarter and IndieGoGo focus on raising money for products sold by a company, StartEngine allows you to crowdfund for capital that can be used across the board, giving funders a stake in the business. The popularity is clear: as of 2025, the total global value of crowdfunding campaigns hit $1.83B, and this value is slated to reach $5.91B by 2034, [according to data from Fortune Business Insights](https://www.fortunebusinessinsights.com/crowdfunding-market-107129). Crowdfunding isn’t an easy solution, however, and there are many [pros and cons to crowdfunding](https://www.hubspot.com/startups/crowdfunding-pros-and-cons). As of early 2025, [376,698 Kickstarter campaigns](https://www.statista.com/statistics/251732/overview-of-unsuccessfully-funded-projects-on-crowdfunding-platform-kickstarter/) never met their goals, highlighting exactly how competitive this financing path can be. ### Non-dilutive funding Another trend to watch closely is the rise of non-dilutive startup funding sources. This is due in part to the fact that these types of funding don’t require startups to give up any equity in their company. #### So what is non-dilutive funding? Non-dilutive funding is a type of startup financing that doesn’t require the startup to give up any equity in the company. There are a few different types of non-dilutive funding, but some of the most popular include [grants](https://www.hubspot.com/startups/fundraising/minority-small-business-grants), loans, and revenue-based financing. Ruth Morales Zimmerman, venture partner at GKS Partners, [compiled a full list](https://www.linkedin.com/posts/ruthzimmer_we-spent-40-hours-researching-every-startup-share-7437500384216031232--5-y/) of nearly 500 non-dilutive funding opportunities around the world. In the U.S. alone, [the Small Business Administration](https://www.sbir.gov/) funds about $4B across 4,000 companies annually. In particular, revenue-based financing is seeing rapid growth, reaching a $12B value in 2025 that could hit a [$432.3B value by 2034](https://www.researchandmarkets.com/reports/6185584/revenue-based-financing-market-outlook-market). ### Merger madness VC funding amounts is finally on the upswing, but consolidation has been steadily growing as a top exit strategy for startups in the past few years, with some startups favoring mergers and acquisitions over more traditional funding. The consolidation trend is particularly interesting given the state of the economy. Typically M&A spending falls in times of economic turmoil; however, a dramatic drop in funding for startups in the middle stages of series fundraising has left said startups looking for alternatives. In 2025, mergers and acquisitions hit a near-record high for these types of deals at [$4.8T](https://www.mofo.com/resources/insights/260115-m-a-in-2025-and-trends-for-2026) for the year. In Q1 2026, M&A deals have already totaled over [$861B](https://www.spglobal.com/market-intelligence/en/news-insights/research/2026/04/global-m-and-a-by-the-numbers-q1-2026), making 2026 a promising year for another near-record or record-high year for consolidations.  ## Startup success and failure statistics Did you know that as much as [90%](https://www.failory.com/blog/startup-failure-rate) of startups fail? It’s a pretty harrowing statistic that can be a hard pill to swallow for some entrepreneurs. But don’t get discouraged — the startup ecosystem has exploded over the past decade, particularly with innovations in AI. ### How startups can succeed in 2026 While the success of a startup depends on an array of different factors, there are a few things many successful startups have in common. Raising capital is one of the most challenging aspects of building a startup. In fact, out of the 90% of startups that fail, [as much as 38%](https://www.techstars.com/blog/advice/8-most-common-startup-cash-flow-problems-and-how-to-solve-them) do so because they don’t have the funds they need to proceed. Another contributing factor that could [determine a startup’s failure](https://www.hubspot.com/startups/resources/top-10-reasons-startups-fail) or success is having a market for the product the startup is selling. While this may seem obvious to some, over [one-third of startups fail](https://www.uschamber.com/co/start/strategy/why-small-businesses-fail) because there is not a big enough market for their product. It's also important for startups to have a team of passionate individuals committed to the company's success. A startup is not a one-person show, and it takes a team of dedicated individuals to make a company succeed. Being aware of why startups have failed in the past can help businesses prepare for the future. As startups continue to grapple with economic headwinds, a clear trend is emerging: companies that built a product with appeal and companies that manage their funds appropriately are most likely to prevail.  ##  ## Startup costs for 2026 Between talent, tech, and marketing, startup costs can add up quickly. And managing them effectively can make or break your business. ### Talent and office space Payroll is a massive expense. In fact, it can sometimes soar past 75% of a startup’s overall operating costs, [according to an analysis by Kruze Consulting](https://kruzeconsulting.com/blog/startup-payroll-costs/). As of 2026, inflation and cost of living is high. As such, startups can expect to pay an average of [$3,000 to $20,000](https://www.joinhomebase.com/blog/how-much-does-it-cost-to-start-a-business) in payroll costs per month. Rent is another big expense. This is an area where costs can range drastically depending on where the startup is located. In some parts of the country, a startup may pay as little as [$25,000 per year](https://www.unita.club/unita-blog/cost-of-renting-office-space-in-the-u-s-in-2025) for a 1,000-square-foot commercial space, while in San Francisco or New York City, costs could approach $100,000 or more for the same space. With rent and personnel accounting for such a large chunk of a startup’s budget, many businesses may opt for hybrid working opportunities or full-on remote schedules. This can help a startup looking to cut costs by reducing office expenses. It also provides additional incentives that may persuade top talent to join the team without necessarily forking out San Francisco payrolls for said talent. ### Technology [A startup’s tech stack](https://www.hubspot.com/startups/tech-stacks) is a key business component that should include tools to improve efficiency, keep data safe, and retain customer engagement. The average startup may use at least 10 to 20 different tools, but these benefits can come at a cost. You can often reduce the cost of your tech stack joining communities like [FounderPass](https://www.founderpass.com/) or [HubSpot for Startups](https://www.hubspot.com/startups/partners). Here is an example of a handful of tech tools a startup might use, why they might use it, and how much it would cost: | | | | |------------------------------------------------------------------------|------------------------------|-------------------------| | __Product__ | __Function__ | __Average Annual Cost__ | | GoDaddy | Domain registration | $5–$120 | | Shopify | E-commerce platform | $348–$4,668 | | [HubSpot Starter Bundle](https://www.hubspot.com/products/crm/starter) | CRM for startups | $84–$120 per seat | | OpenAI’s ChatGPT & Codex | Artificial intelligence tool | $240 per user | | Slack | Communication | $0–$216 per user | | Zapier | Automation | $0–$828 | | Amazon Web Services (AWS) | Cloud computing | $180–$12,000 | Going forward, technology, specifically AI, will become an increasingly necessary component in a startup’s arsenal. ### Marketing [According to Gartner](https://www.gartner.com/en/marketing/topics/marketing-budget), marketing budgets have faced a decline in recent years, with many businesses allocating only 7.7% of their total budgets toward marketing. For a startup, marketing is crucial to getting the word out about your business. But with tighter budgets than ever, spending on the appropriate platforms is critical. Startups allocate their budget toward different channels depending on their goals and industry, so there’s nothing set in stone on that front. [A study from Statista](https://www.statista.com/statistics/1222784/marketing-budget-share-channel/), however, shows that startups across North America and Europe are generally prioritizing search advertising, especially to get brands mentioned in AI search results. Digital display advertising and social media advertising investments also remain high. Moving through 2026, more and more startups will continue to invest in AEO (answer engine optimization), [AEO is showing high ROI](https://blog.hubspot.com/marketing/answer-engine-optimization-case-studies) with results like 600% citation uplift and 30% more time spent on a website by AI-referred visitors. While SEO remains important, AEO is the new name of the game. [According to the 2026 HubSpot State of Marketing report](https://www.hubspot.com/state-of-marketing), 58% of marketers have found higher conversion rates from AI referrals over organic site visitors, revealing a shift from emphasizing SEO in marketing spend to prioritizing AEO.  ## Most promising startup industries The total value of all unicorns globally is just above [$8.6T](https://eqvista.com/complete-list-unicorn-companies/), with the world’s most valuable, OpenAI, coming in at $852B. Those are some big numbers, but it’s important to note that not all startups or startup industries are created equal. While most unicorns currently reside in the AI space, there are big opportunities for startups in biotech, fintech, and defense tech spaces. ### AI startups Artificial intelligence has had an extreme boom in the past several years, with AI startups already raising over $255B in 2026, [Pitchbook data revealed](https://pitchbook.com/news/articles/q1-2026-ai-funding-blows-past-2025-total-with-three-deals-accounting-for-67-of-capital). VC investments in AI made up around 30% of total VC investing in 2022; in 2025, this amount jumped to [61%](https://www.oecd.org/en/publications/venture-capital-investments-in-artificial-intelligence-through-2025_a13752f5-en/full-report.html). These investments have been led by powerhouses like Open AI (creator of ChatGPT) and Anthropic (creator of Claude). While any AI startup may have had a strong shot at strong fundraising in the early 2020s, times have changed. AI is no longer a differentiator; it’s become standard. Now, investors are looking for vertical AI opportunities, where AI has specific purposes and use cases. Being a generalist doesn’t quite work the same anymore. Instead, digging deep into one problem and solving it via AI is what helps a startup stand out from the sea of AI companies. [According to Grand View Research](https://www.grandviewresearch.com/industry-analysis/vertical-ai-market-report), the vertical AI market reached $10.3B in 2025, and it’s expected to hit $74.5B by 2033, with a compound annual growth rate of 28.3%. ### Fintech startups Fintech, or financial technology, uses technology to facilitate transactions, documentation, or trading within the financial sector. Some examples of successful fintech firms include [Chime](https://www.chime.com/), [Stripe](https://stripe.com/), and [Cash App.](https://cash.app/) It’s an industry that has absolutely exploded in recent years, and it’s easy to see why. Fintech makes some parts of the financial world, like trading or transferring money, more accessible and cheaper for the everyday person. It also makes international transactions seamless. But this industry isn’t just about digital payments. Fintech is a broad category that covers everything from financial health to neobanking and beyond. And because it’s so wide-reaching with plenty of room for innovation, fintech attracts a lot of investors. As they say, you have to spend money to make money, and what better way to do that than to spend money on the ways we make, save, and transfer money? Already this year, global VC funding in fintech has hit [$12B](https://news.crunchbase.com/fintech/global-startup-venture-funding-up-deals-down-q1-2026/), up 5% compared to the same time period in 2025. As the global economy continues to struggle, consumers will likely double down on alternative banking, fee-free trading, and other financial technology services that help them optimize their finances. Fintech is projected to reach a market value of [$1.76T](https://www.fortunebusinessinsights.com/fintech-market-108641) by 2034, revealing just how lucrative this space can be for startups. ### Defense tech startups Funding for defense tech startups hit a record high in 2025, reaching $49.1B (up from $27.2B in 2024, [Defense News reported](https://www.defensenews.com/industry/2026/01/20/defense-tech-startups-had-their-best-funding-year-ever-in-2025/)). Just this year, [Anduril Industries raised $5B in its Series H](https://www.anduril.com/news/anduril-announces-usd5b-series-h-raise) to continue its mission to build “advanced defense systems at scale.” What’s driving this rapid increase in defense tech investing? Geopolitical tensions and conflicts are rising, and countries are looking to contract defense tech that increases national security against physical and cyber attacks. Cybersecurity is one of the biggest sectors growing within the defense tech industry, [according to New Market Pitch](https://newmarketpitch.com/blogs/news/defense-tech-market-size). ### Biotech startups Biotech is an industry where biology and engineering meet to tackle some of the world’s most complex problems, from world hunger to quick pandemic responses. [Precedence Research found](https://www.precedenceresearch.com/biotechnology-market) that the biotech market reached $1.77T as of 2025. Further, the firm predicts that this market will hit over $2T in 2026 and could grow to $6.34T by 2035. Despite rising R&D costs as well as policies that limit funding for scientific research, biotech is still blazing forward. Some of the most exciting new biotech trends that have emerged in recent years include: - __Cell and gene therapies (CGT):__ These therapies involve adjusting cells or genes, sometimes sourced directly from a patient, and inserting them into a patient to treat specific diseases such as certain cancers, multiple sclerosis, and ALS. - __Bioprinting:__ This is a type of 3D printing technology that can emulate the characteristics of natural tissue, creating the potential to produce human organs and more. - __Just-in-time delivery:__ With the rise in CGT, medical systems need new ways of getting these treatments to patients quickly. These treatments can’t be stored on a shelf, so JIT delivery optimizes patient care and reduces time spent in medical centers. - __Personalized medicine:__ This is a new take on medication, offering up a more personalized approach to take care of individuals’ needs. - __AI for drug discovery:__ Artificial intelligence can reduce time and costs associated with pharmaceutical drug discovery, which can speed along the process from discovery to clinical trial to regulatory approval. ## Startup team trends There’s no secret that the pandemic, political turmoil, an economic downturn, and a rapid rise in AI technology have all shaped how humans work. Founders and startup employees are looking for more stability, whether that’s with work/life balance, reduced stress loads, or more financial certainty. These factors have historically been opposite to the startup work experience: long hours, low pay, and high stress in exchange for work that feels fulfilling and meaningful and that could have a big financial payoff down the road. But now, things are changing. Founders are rethinking how they [build a strong startup team](https://www.hubspot.com/startups/scaling-smarter/building-startup-team), and AI is making it possible to work more efficiently with fewer resources, giving employees better balance. We’re also seeing more emphasis on ESG and eco-minded targets, even if startups have to take on these goals in the face of policy headwinds. ### Health and wellness The COVID-19 pandemic sparked a shift in priorities for employees and employers alike. As the world collectively reimagined what’s truly important in the workplace, health and wellness quickly stole the show. In many cases, a business’s approach to health and wellness will determine whether an employee stays or walks out the door. Wellness initiatives and opportunities are no longer just a perk that makes up for a lower salary for startup new hires; many employees expect to see these initiatives as a baseline. As of 2025, [work/life balance has passed pay](https://fortune.com/2025/11/17/work-life-balance-outranked-pay-top-perk-peoeple-choosing-a-job/) as the top consideration for employees looking to stay at a job or take a new job. Gen Z in particular is leading the charge for more balance and wellness in the workplace; 70% put mental health above high pay in considering a job. Workers today are looking for flexible schedules, hybrid or remote opportunities, and more manageable workloads to reduce stress, and this trend is expected to continue throughout this year. ### Tech and data Remote work has exploded over the last two years and isn’t going away anytime soon. As such, startups have leaned heavily on new technologies, from predictive analysis platforms to automation and AI, to adjust to this new normal and create better workplaces. As startups pile into new tech, the global HR software market is expected to see a compound annual growth rate of more than [12%](https://www.grandviewresearch.com/industry-analysis/hr-software-market) through 2030, reaching $36.62B. Some of the things employers are focusing most heavily on are: - Cloud-based platforms for scalability - Strategic workforce planning - Analytics platforms - Skill-building at scale - AI-based productivity tools - Personalized employee engagement These tools help employers utilize data to measure productivity, optimize rewards, identify pay inequality, improve efficiency, and much more — all while helping employees build skills and feel more empowered. ### Upskilling and training One of the most important factors that contributes to employee happiness is being given the opportunity to learn new skills. This should be an easy win for any startup that cares to make an effort on this front, especially considering [63% of employers](https://www.weforum.org/press/2025/01/future-of-jobs-report-2025-78-million-new-job-opportunities-by-2030-but-urgent-upskilling-needed-to-prepare-workforces/) report skill gaps as their biggest barrier. This gap could widen in the near future because of rapidly evolving technology (especially with AI) and the green transition. [Over 50%](https://www.bcg.com/publications/2026/ai-will-reshape-more-jobs-than-it-replaces) of jobs could be reshaped by AI, leading to more skills and training necessary for workers. Offering training and personal development is an opportunity for employees to become more fulfilled in their positions and helps companies by filling their rosters with certified experts on any given subject. Upskilling ultimately saves companies money, too, by reducing turnover. [According to Training Orchestra](https://trainingorchestra.com/employee-training-trends/), 94% of employees would stay in their jobs for longer if their companies offered upskilling opportunities. This trend will only continue as AI further shifts how we work. ### ESG in the startup ecosystem Environmental, social, and governance (ESG) is a trend that no one can ignore. In fact, entire venture capital firms and hedge funds have been created around ESG principles. [According to Vena Solutions](https://www.venasolutions.com/blog/esg-statistics), more than 70% of investors believe ESG should be part of a company’s core business strategy, and over half of surveyed CEOs expect to see high ROI from their sustainability efforts by 2030. ESG is a way of measuring a company's impact on people and the planet, and it can make or break a startup’s chances of getting funded. From seed-stage funding to growth-stage funding, venture capital firms are taking ESG considerations into account. More and more startups are considering ESG practices when making business decisions. And it's not just because it's the right thing to do. There’s also a growing body of evidence that shows that funds that prioritize ESG principles outperform those that do not. [Key ESG reported](https://www.keyesg.com/article/50-esg-statistics-you-need-to-know) that 84% of S&P 500 companies say climate change is a financial risk, meaning companies that aren’t investing in climate solutions could face significant financial impacts in the future. For startups, it’s easier to build ESG principles into your business early on rather than trying to incorporate them later, when it could be too late. ### Environmentally conscious While some U.S. policy rollbacks may limit legal liabilities when it comes to environmental sustainability for startups, consumers and investors are seeking out startups that are eco-conscious. [According to Science Based Targets](https://sciencebasedtargets.org/target-dashboard), over 11,000 companies that account for over 40% of total global market capitalization have established science-based environmental goals validated by the Science-Based Targets initiative (SBTi). Further, corporate climate target-setting [increased by over 40%](https://sciencebasedtargets.org/news/corporate-climate-target-setting-up-40-in-2025-with-asia-emerging-as-a-centre-of-gravity) in 2025 alone compared to the year prior, revealing a growing trend in companies taking accountability into their own hands. With the AI boom, data centers are becoming a hotly debated topic for their energy consumption. Investors and startups, particularly those in AI, will be expected to have goals toward reducing their impact on the environment and communities that could be impacted by data centers. ### Social responsibility Social responsibility is another growing trend in the startup ecosystem. Companies are no longer just about posting profits and increasing shareholder value; they’re now expected to give back, take care of their employees, and maintain an ethical supply chain. Startups with strong policies that protect employees from misconduct, ensure nondiscriminatory hiring practices, and pay fair wages are not just being recognized, they are being celebrated among investors and consumers alike. ### Startup governance Governance, or a startup’s leadership, has also come under a microscope in recent years. Things that used to fly in the past are no longer tolerated. Some key elements investors are taking into consideration include: - __Domain expertise:__ To stand out from the high amounts of competition, investors want to know that your founding team are deeply knowledgeable and passionate about what your startup does. - __Clean political track record:__ Companies should move away from donating to political candidates to receive preferential treatment. - __Accurate and transparent accounting:__ Companies must be open and honest in their financial reporting. - __Diverse leadership:__ Companies must provide equal opportunities across all levels, including management and executive leadership. ### Diversity in startups Diversity and inclusion efforts within companies were rising in the early 2020s, but more hostile policies and sentiments in the U.S. toward diversity, equity, and inclusion (DE&I) have stifled opportunities for growth here and put an even bigger burden on founders who were already underrepresented. Here are some quick facts to note: - Diverse leadership makes it [45% more likely](https://www.unc.edu/discover/research-shows-diversity-drives-value-innovation/) for a company to increase market share. - Just [3%](https://femaleswitch.org/startup-blog/tpost/startup-funding-gender-gap) of VC funding goes toward women founders. - Only around [1 in every 50](https://www.sfexaminer.com/news/technology/black-startup-founders-racial-funding-gaps/article_ab54544a-e888-445d-a39e-24f346357522.html) founders *and* lead investors is Black. - In the U.K., ethnically diverse individuals are nearly twice as likely to jump into early-stage entrepreneurship, yet diverse founders only received 9% of total investment value from 2013 to 2023. - As of 2023, just [0.5%](https://startout.org/index/) of all VC funding goes to startups with LGBTQIA+ founders. - Founders with disabilities and neurodivergence are [400 times less likely](https://www.forbes.com/sites/gusalexiou/2023/08/15/disabled-founders-400-times-less-likely-to-receive-vc-funding-says-new-report/) to secure VC funding compared to neurotypical founders or founders without disabilities. - Data shows that [81%](https://thebusinessshowus.com/blog-library/disabled-entrepreneurs) of founders with disabilities have met inaccessible systems when applying for funding.  These stats are particularly important because while white men only represent 30% of the U.S. population, they make up 58% of all investors and manage a shocking [93% of all VC dollars](https://www.sobvr2025.blckvc.org/). This highlights a significant disconnect in opportunities for diverse founders in the startup ecosystem that must be remedied moving forward.  ## Trends in startup exits Whether a startup is going public, getting acquired, or merging with another company, the exit can finally provide founders and shareholders a chance to cash in. ### Going public Going public is a huge deal for startups. It brings their company into the public light and opens up a whole new level of funding opportunities and, of course, scrutiny. There are three primary ways to take a company public: an initial public offering, a special purpose acquisition company, and a direct listing. Each of these has its own set of benefits and challenges. An __initial public offering__, or an IPO, is probably the most well-known method of taking a company public. Some of the benefits include a ton of media exposure and pricing guidance from top Wall Street banks, though they can be particularly costly. __Special purpose acquisition companies__, or SPACs, are companies created to raise funds from an offering and use the funds for the purpose of acquiring another company. If the merger or acquisition fails to materialize, the proceeds from the offering are returned to shareholders. A __direct listing__ is an increasingly popular option for larger, more established companies. Direct listings help companies pay less money to lawyers and bankers while letting the market, rather than bankers, decide how their shares will be priced. IPOs dropped off in 2022 with only 90 company debuts on the market, but they have rebounded sharply in recent years. This year, expect to see multiple centicorns, which refers to companies that hit $100B IPOs. [EY data showed](https://www.ey.com/en_us/insights/ipo/ipo-market-trends) there were 216 IPOs in 2025, and companies like SpaceX, OpenAI, Anthropic, and Databricks could see big IPOs this year. ### Acquisition Acquisitions are the most common exit strategy for startups. The reason for this is that, while public offerings may lead to a bigger payday, acquisitions are less risky, and they can give the founder the opportunity to move onto other things. Acquisitions also give investors and shareholders a clear picture of how much money they will receive and when they will receive it, while public offerings require a stakeholder to sell their shares at whatever price the market determines is fair. Acquisition is a common exit strategy for founders, and while it may be easier than scaling to IPO, it’s still a difficult path. Startups have the [highest rate of acquisition](https://www.linkedin.com/posts/tracecohen_will-your-startup-get-acquired-heres-what-ugcPost-7301006493313613835-Qltz/) around Series D, and less than 2% of seed-stage startups get acquired. ### Merger While mergers are similar to acquisitions, there are some differences to consider. Acquisitions involve a larger company taking over a startup and absorbing their processes, products, and often even talent into their business. Mergers, on the other hand, often involve two companies coming together to create an entirely different company. Mergers are appealing to startups as an alternative to fundraising, allowing the company access to fresh talent and tech or the funds they need to advance their business. Merger considerations are typically paid directly to shareholders. And unlike a stock sale, 100% of the interest of a company can be transferred without the consent of all stakeholders. ### Exit trends by the numbers For 2026, M&A deals are huge. Last year, M&As hit [$4.8T](https://www.mofo.com/resources/insights/260115-m-a-in-2025-and-trends-for-2026), a near record-high. [S&P Global has reported](https://www.spglobal.com/market-intelligence/en/news-insights/research/2026/04/global-m-and-a-by-the-numbers-q1-2026) that M&As are at $861.1B for Q1 2026, 10% higher than the same time last year, meaning 2026 could be a record year for mergers and acquisitions. M&A deals continue to make up the biggest chunk of total global exits as of 2025. Global M&As last year reached 10,466, while IPOs, including SPACs, reached 549, [according to CB Insights data](https://www.cbinsights.com/reports/CB-Insights_Venture-Report-2025.pdf). ## Best countries for a startup The startup ecosystem is expansive and certainly not limited to just a handful of countries, though some do tend to outperform others. While the U.S. is unlikely to lose its position as the de facto startup capital of the world, China continues to hold second place for highest startup outputs, and places like the U.K. and United Arab Emirates are seeing rapid growth in the startup space. ### United States The U.S. is likely remain a top destination for startups, thanks to its strong research and development capacity and lots of funding opportunities. [According to the latest Global Tech Ecosystem Index](https://dealroom.co/tech-ecosystem-index-2026/) from Dealroom.co, the U.S. has 10 of the 20 biggest startup ecosystem hubs in the world, including the Bay Area, New York City, and Boston. Austin, Miami, Seattle, and Washington, D.C. are quickly growing as other huge regional hubs. The United States has minted a total of [747 unicorns](https://www.cbinsights.com/reports/CB-Insights_Venture-Report-2025.pdf?ip_et_ctx=23875269_31_9) and is responsible for about [half of all unicorns](https://my-cpe.com/insights/news-and-insights/infographics/the-world-s-top-countries-for-startup-ecosystems) globally. ### China China is a startup behemoth, with [over 16,000 startups](https://dealroom.co/countries/china/) that have $100K or more in funding. The country is also responsible for [more than 150 unicorns](https://www.e-resident.gov.ee/blog/posts/unicorns-per-capita-top-countries/), including one of the highest-valued unicorns, ByteDance. The country may be behind the U.S. in comparing startup market values, but China’s startup ecosystem is rapidly growing, with a [54.6%](https://www.startupblink.com/blog/top-countries-by-total-startup-output/) year-over-year increase in startup output. China has historically had high oversight and censorship that created challenges for domestic startups, but in recent years, [new funding](https://english.www.gov.cn/news/202512/26/content_WS694e4e56c6d00ca5f9a08486.html) opportunities, [lower tax rates](https://msadvisory.com/china-tax-rates/), [state-backed VC funding](https://www.reuters.com/world/asia-pacific/china-venture-capital-funding-set-hit-record-q1-state-led-tech-push-2026-04-01/), and a focus on tech innovation have all helped the startup ecosystem thrive here. ### United Kingdom Like the U.S., the U.K. is very supportive of its startups, with a slew of grants, tax credits, and government initiatives to help aspiring entrepreneurs. The U.K. has a startup market worth $1.2T, with over 25,000 funded startups and more than 150 unicorns, [according to](https://dealroom.co/guides/united-kingdom) [Dealroom.co](https://dealroom.co). London is the top hub here, but Glasgow is seeing phenomenal growth, with VC fundraising here up 551% in 2025 compared to 2024. ### UAE In recent years, UAE has focused on becoming a key player in the startup industry. In 2025, UAE launched a campaign called “The Emirates: The Startup Capital of the World” to empower entrepreneurs. Favorable tax policies and regulatory support are aiding rapid startup growth in this region. VC investing went up 44% in UAE from 2024 to 2025. Dubai, in particular, is emerging as a top metro hub for startups wanting to raise VC. Dubai experienced a [445% jump](https://dealroom.co/guides/global) in VC investments from 2024 to 2025, revealing major opportunities for startups here. ### Canada Canada has a vibrant startup ecosystem with supportive regulation and a number of government funding initiatives. It’s home to nearly [10,000 startups and 22 unicorns](https://www.startupblink.com/startup-ecosystem/canada?page=1), and so far in 2026, startup ecosystem growth is up 9% from last year. In particular, Canada has a strong university-led push for startups, with many startups here born either from research or invested by alums from top universities like the University of Toronto, which has [65 alums](https://dealroom.co/universities/university-of-toronto/) that went on to become startup unicorn founders and $240B in enterprise value of alum-founded startups. ## Conclusion The macroeconomic environment in 2026 has certainly driven some of the major trends in the startup ecosystem, though there is a lot of promise, especially for innovative startups prioritizing vertical AI. Going into 2027, many of the trends you’ve seen this year are likely to persist. For many startups, it’s time to tighten the belt and get creative with fundraising. While the economy is looking fairly gloomy for the foreseeable future, it’s not necessarily a bad time for startups to get some skin in the game. In fact, creatively solving problems that people face today is one of the best ways founders can succeed in challenging times. Learn about how [HubSpot for Startups](https://www.hubspot.com/startups/partners') can help your business today. We’ve partnered with VCs, accelerators, incubators, and entrepreneurial organizations across the globe to help entrepreneurs go from early stage to public offering.   Written by HubSpot for Startups Your go-to destination for education, inspiration, and resources for startup founders. * * * ## Startup Resources [](https://www.hubspot.com/startups/resources/what-is-an-accelerator) [Startup Trends](https://www.hubspot.com/startups/resources/tag/startup-trends) Jan 16, 2023 ### [What Is a Business Accelerator? 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