Crystal Ball Predictions | What do you expect from the funding landscape in 2026?
This is the last story in our annual Investor Outlook Series, shining a light on investor appetites going into the new year.
In our annual Investor Outlook Series, we have explored portfolio performance, macroeconomic conditions, emerging technologies, and how artificial intelligence is reshaping the startup landscape. Today, we return to the question we have asked since launching the series in 2012: What is your crystal ball prediction for the year ahead?
Eller Kelliher, Chief Investment Officer for Launch Tennessee’s InvestTN fund, believes 2026 could be a turning point for capital deployment.
“We are going to be looking at some exciting follow-on opportunities. I am anticipating more co-investment deals with active partners across the state, like Brickyard and Market Square Ventures,” Kelliher said. “We hope to build a strong pool of angels who are eager to jump off the sidelines.”
She is hoping to see more people like Jay Shaffer, an angel investor with Atlanta Technology Angels and VentureSouth. Shaffer has become a vocal advocate for first-time investors and brings personal experience from the founder side.
“I’m hoping we see passionate founders who have a problem and an innovative solution,” Shaffer said. “I’ll be behind them and try to rally others to support their cause in Chattanooga and throughout the Southeast.”
Shaffer joked that his own entrepreneurial past helps him relate to early-stage founders.
“I tell founders that when I was building startups, I ran with sharp scissors and fell,” he said. “So I feel comfortable telling them to be careful. I have that experience.”
Some investors say 2026 could be especially disruptive for legacy industries. Brandon Bruce, Co-founder and General Partner of Market Square Ventures, expects strong deal flow and increased acquisition activity as major companies reposition themselves.
“One large public merger that could have implications for the Knoxville film economy is Netflix’s pending acquisition of Warner Bros, which owns Discovery Inc. The deal is still subject to regulatory approval, but it is a significant development,” Bruce said.
“I think what we saw in 2025 was a renewed appetite among big companies for acquisition. It is a much healthier M&A market than a couple of years ago,” he added. “Those trends are favorable for startups because they create growth paths and exit opportunities.”
Bruce is not alone in expecting a high-impact year for major players. Travis Manasco of Solas BioVentures predicts a headline-grabbing moment in the healthcare sector.
“I will be provocative and say that at least one major med-tech or healthcare AI company will IPO,” Manasco said. His firm invests across the Southeast and has watched AI gain traction in clinical data, diagnostics, and operational tools.
A successful IPO, he said, would validate AI as a major disruptor in the healthcare industry.
Others are hoping 2026 brings something more basic: stability.
“I hope nothing crazy happens. We hope there are no black swan events,” said Grady Vanderhoofven, President and CEO of Three Roots Capital. “We are cautiously optimistic because there are a lot of positive trends. I expect more deal activity.”
His biggest prediction centers on collaboration.
“I think collaboration is very important. It means co-investing, deal sharing, and syndications,” Vanderhoofven said. “Investing is a team sport. The most successful investments I have seen in the last 25 years involved multiple investors, where you get the combined capital and knowledge of a group. Those situations tend to produce the best returns.”
For others, 2026 is predicted to be a year of acceleration.
Brickyard Co-founder Cam Doody said the Chattanooga-based firm is preparing for significant momentum.
“Our Fund 2 is kicking off in Q1, and we are hoping to complete fundraising by mid-year. We also have four or five more investments to make out of our current fund,” Doody said. “Our first year, we looked at 400 deals. This year, we are going to look at more than 10,000 companies.”
If the state’s investors are right, 2026 may bring more capital, more collaboration, and more opportunities for Tennessee founders than any year in recent memory.
Like what you've read?
Forward to a friend!