Why deeptech founders are dictating term sheets in 2026 — and how you can secure a fair deal

The UK’s latest venture term sheet guide says the market is splitting in two. AI and deeptech companies are drawing more attention and, in many cases, more founder-friendly terms. Other sectors are facing a tougher read from investors who are getting pickier about where they put money and how much control they want back.

That shift has pushed larger deals to the front of the queue. They now account for 31% of all term sheets, up from 26% in 2024. At the same time, venture capital is concentrating into fewer high-growth companies. And yet the mix is not just AI and deeptech: fintech and life sciences still sit among the biggest areas for UK venture investment.

The main takeaway for founders is simple: the term sheet is not really about valuation alone. Glen Waters of HSBC Innovation Banking says the legal structure matters just as much, especially board control, approval rights and liquidation preference. A headline number can look attractive while the rest of the document quietly hands investors the real leverage.

That’s why competition matters so much. Francisco Vigo of GeoSurge says founders with multiple term sheets are in a very different position from those with only one and a runway that is running low. During GeoSurge’s most recent raise, a $12m seed round, he says the company saw an “insane amount of interest” as investors looked to back AI businesses tied to the UK’s AI push.

Waters also points to a contrast between London and the rest of the UK. London has the denser capital pool, which tends to make terms more founder-friendly. But over 50% of seed deals in life sciences, cleantech and energy now happen outside London, helped by EIS and VCT money. Those funds are valuable, but they are built to protect capital, so founders should expect tougher reporting, consent rights and fees.