The Knack

Real signals on talent and hiring, from DK Partners.

August 04, 2026

Mid-year check:
how 2026 started, and how it's going

Going into 2026, many expected venture funding to rebound, though selectively; the IPO market to reopen more broadly; and AI to push deeper into nearly every industry and function.

With the first half of the year behind us, we can test those expectations against real evidence. Here’s how the biggest predictions are tracking, and what the shifts may mean for the founders, leaders, and talent in DK’s network.

📚️ Related Read:
Markets aren’t the only thing worth evaluating at the halfway point. Cassie’s midyear leadership audit offers a practical framework for assessing what your team has shown you so far.

A bigger year for venture, but not a broader one

Going into 2026, the venture outlook was cautiously optimistic: more capital in motion, with continued selectivity around where it would land. The direction was right. The scale was not.

U.S. startups raised more than $400 billion in the first half of 2026, already surpassing every prior full-year total. Globally, KPMG recorded roughly $560 billion across the first two quarters.

The more important story, however, is where that capital went. Much of the increase was driven by AI, megadeals, and a relatively small group of companies able to command outsized rounds. Aggregate funding rose dramatically, but the recovery did not broaden at the same pace.

For founders and operators, that creates a market with two competing truths: there is more capital available, and it remains exceptionally difficult to access outside the categories attracting the greatest investor conviction. For talent, large funding announcements may signal opportunity, but they still require context around runway, hiring plans, business fundamentals, and how much of the capital is already committed.

Venture is having a bigger year, yet it is not a broader one. And the category absorbing much of that growth is impossible to miss.

AI takes the lion’s share 

AI did more than lead venture funding; it dominated the scoreboard. In the first half of 2026, AI companies and rounds of $100 million or more captured the overwhelming majority of U.S. invested capital..

For founders, leaders, and talent alike, the signal is less “say AI” and more “show its advantage.” Where does it improve the product, economics, speed, or quality? And where is it simply inflated positioning or expensive tooling without meaningful return?

📚️ Related Read:
The same test applies to hiring. Melanie explores it in The AI Trap: where AI earns its keep in a search, and where it can cost you the candidate.

The IPO window reopened, just not for everyone

The IPO recovery finally arrived in the second quarter. Globally, 483 IPOs raised $186.8 billion in the first half of 2026. Proceeds more than tripled year over year, even as the number of listings fell 12%. In the U.S., the first half alone would rank as the second-most-active full year on record by proceeds.

The door is open, but the guest list is selective. The strongest demand is going to the ones we’d expect: larger, more mature companies with solid fundamentals, clear growth stories, and the flexibility to move when the window allows.

For founders and investors, that restores a credible path to liquidity. For leaders and talent, a future IPO dream matters less as an exit story and more as a signal of operating discipline, financial readiness, and the pressure the business is preparing to absorb.

Fractional leadership grows up

The appeal for an early-stage company is easy to understand. Robert Half places the midpoint starting salary for a U.S. CFO at nearly $270,000, before considering the rest of the compensation package. A fractional model can give a company access to seasoned judgment before the scope, or the budget, supports a permanent executive seat. For executives, it trades the depth of one company for greater agency and range: the ability to choose high-value problems, work across different businesses, and carry lessons from one operating environment into the next.

A fractional chapter should no longer be read automatically as time between “real” roles. For many experienced executives and operators, it is a deliberate portfolio career, and it can give an early-stage company access to leaders who would not otherwise consider joining full time.

Leaner teams, higher stakes

AI was predicted to influence workforce decisions, and as expected, it did. Technology layoffs have remained elevated through the first half of 2026, even as companies continue investing heavily in AI. Across industries, AI was cited in roughly 23% of announced cuts.

That makes AI a meaningful part of the story, but not the whole story. Restructuring, economic pressure, shifting priorities, and offshoring are moving alongside it. And in some cases, companies appear to be acting on AI’s promised efficiency before the gains have fully materialized. Gartner found that less than 1% of layoffs were directly attributable to realized productivity gains from AI.

Team design is the most palpable shift across organizations.
 In a Gartner survey, 40% of HR leaders said their organizations had eliminated outdated roles, while nearly half had redesigned teams to be more cross-functional or agile.

The talent map is widening too. A Blind survey of 2,392 professionals at major technology and banking companies found that 52% expected their employers to increase hiring in India, while 38% believed that hiring was replacing U.S.-based roles. That is employee perception, not company disclosure, and Big Tech’s workforce model is not a blueprint for an early-stage company. But the underlying signal matters: founders have more choices about where and how they build.

The strategic question is not simply whether talent costs less somewhere else, which Melanie explores in her latest post. It is which work requires proximity to the customer, product, or leadership team; which capabilities can thrive across borders; and whether the company has the systems and managers to make distributed work succeed.

When teams become smaller, flatter, or more distributed, leadership matters more, not less. Fewer layers do not eliminate management; they concentrate it. Every leader must create clarity, make decisions, develop talent, and move work across functions without becoming the point through which everything must pass.

Melanie’s piece on hiring metrics picks up the other half of this problem: whether a hiring process can spot quality before urgency turns speed into a costly miss. A leaner team only works if the people in it were chosen well.

Half the year in, that's the throughline. Capital came back, but it landed on fewer companies. The IPO window opened, but mostly for the already-prepared. AI is earning its keep in some places and covering for weak arguments in others. None of that rewards size or speed on its own. It rewards founders and leaders who can tell the difference and act on it.

That’s a Wrap for The Knack!

Our Best,
The DK Partners
https://dkrecruiting.com/