Things I Think I Think - Q1 2026 — Chris Neumann
Short summary
The article outlines key trends in venture capital and technology as of early 2026, focusing on the bifurcation in VC funding, the revival of the maker culture in San Francisco, and the changing nature of competitive advantages in the age of AI. It emphasizes the widening gap between Silicon Valley and other startup ecosystems worldwide.
- Top 5% of Seed rounds now average $115.5M, essentially Series A territory, as megafunds crowd out traditional Seed funds and create a looming Seed crunch
- AI is compressing time-to-market so much that traditional tech-based moats are giving way to sheer velocity and adaptability as the real competitive advantage
- YC is scaling up batch sizes and valuations, setting the pace for the entire accelerator market
- The gap between Silicon Valley and other startup ecosystems is widening, with founders/investors elsewhere largely unaware of how fast things are moving in the Bay Area
Full summary
In the first quarter of 2026, the venture capital landscape is shifting dramatically, particularly for AI-native companies. These firms are seeing a surge in funding and valuations, with the top 5% of Seed rounds averaging $115.5 million, resembling traditional Series A rounds. This trend highlights a bifurcation in VC, where megafunds are increasingly backing these top-tier Seed companies, leaving traditional Seed funds struggling to keep up. Founders looking to raise capital should brace for a Seed crunch due to evolving investment criteria among these funds.
San Francisco is experiencing a mini revival in the maker culture, spurred by innovations like moltbot clawdbot OpenClaw and advancements in Claude Code. While this resurgence won’t replicate the past maker faire era, it’s generating a lot of energy and activity in the tech community. Meanwhile, discussions about business moats are evolving as AI compresses time-to-market. The focus is shifting from traditional moats based on technology to a need for rapid adaptation and velocity.
Y Combinator is setting the pace in the accelerator space, ramping up its batch sizes and valuations, which influences the overall market. In contrast, the gap between Silicon Valley and other startup ecosystems is widening. Founders and investors outside California often remain unaware of the rapid changes happening in the Bay Area, leading to a disconnect in approaches and technologies. This disparity underscores the fast-paced evolution of ideas and investment in Silicon Valley compared to other regions.