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

In 2026, deeptech founders are gaining significant influence over the terms of investment deals, according to insights from HSBC Innovation Banking. Glen Waters, Head of Tech and Life sciences Banking at HSBC Innovation Banking, describes the market as a "barbell," with capital heavily concentrated at both extremes - large fundraises for high-growth companies and early-stage businesses.

AI and deeptech companies are reaping the benefits of this trend. During GeoSurge's recent $12 million seed round, they received a surge of interest from venture capitalists, recognizing the UK's potential for AI leadership. Founders in deeptech sectors can command premium terms and negotiate favorable conditions, such as maintaining majority control of board decisions and limiting investor approval on day-to-day operations.

These factors make deeptech companies the most favored among investors in the current funding landscape. To capitalize on this favorable environment, startups must present a compelling case to multiple investors, increasing their leverage during negotiations. Investors typically hold minority stakes in startups and rely on control rights to guide the company's direction.

Understanding these control rights is crucial for founders to make informed decisions and avoid aggressive terms like swamping rights, which can lead to enhanced voting control and board dominance upon specific triggers. London continues to dominate the UK funding scene, but a growing number of seed deals in sectors like life sciences, cleantech, and energy are now taking place in other regions.

This shift is driven by Enterprise Investment Schemes (EIS) and Venture Capital Trust (VCT) funds, which offer tax reliefs to individual investors, encouraging them to support smaller, higher-risk startups.