The last 18 months have been confusing. AI is booming, but everyone else is struggling to raise. You keep hearing that the market is "correcting," but you don't see where the money is actually going.

A few days ago I spoke to Dan Bowyer from SuperSeed VC to get a straight answer. Dan is a "noisy bugger" on LinkedIn. He doesn't use polite VC language. He tells you exactly what is happening behind closed doors.

We talked about 2026. Not 2025. 2026. Because if you are building now, that is the market you are selling into.

Here is what founders need to know.

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When investors say "defense," you probably think of missiles and drones. You think, "I'm not a defense startup, this doesn't apply to me." You are wrong.

Dan explained that the big money is moving into Resilience. Governments and big funds are scared. They are worried about supply chains breaking. They are worried about energy running out. They are worried about food security.

This means "Defense" actually includes:

If your startup helps a country stand on its own feet, you are suddenly very attractive. There is a lot of government-backed capital (like the British Business Bank) specifically for these areas. Check if you fit this narrative. You might be a "defense" startup and not even know it.

For ten years, the advice was simple: build software. It scales fast. Margins are high. Investors loved it.

That tide is turning. Investors are starting to look at physical things again . They want "Deep Tech" and "Industrial Tech." They want things they can touch.

Why? Because software is getting too easy to copy. If you can build it in a weekend with ChatGPT, so can everyone else. But building a factory, a new material, or a robot? That is hard. And investors are starting to value "hard" again.

We had to talk about AI. If you are building a thin wrapper around OpenAI or Anthropic, Dan was very clear: Your days are numbered.

The big models are getting too smart. They will release your entire product as a free feature next week. Dan mentioned that he has friends who lost fortunes on portfolio companies because they got "sideswiped" by a random update from OpenAI .

The real shift for 2026 is Open Source in the Enterprise. Big companies (banks, insurers, governments) do not want to pay OpenAI billions of dollars. They want to control their own data. They want to use cheaper, open-source models like DeepSeek or Llama .

If you are a B2B founder, don't just resell GPT-4. Build tools that help companies use open-source AI securely and cheaply. That is where the budget will be.

I know it feels personal when you get rejected. But you need to understand the other side of the table.

Dan admitted that fundraising for VCs right now is miserable . Many funds have not returned any cash to their investors in 8 years . They are "zombie funds." They exist, but they can't raise new money.

So when they ghost you, it is not always about your pitch. They might literally have no money to give you.

What can you do?

The most important takeaway was this: No one knows what is going to happen in 2026. Trump is doing crazy things in the US. Europe is trying to figure out its own path.

But chaos creates opportunity. There is a massive shift happening towards "Sovereignty"—countries wanting to build their own tech, their own energy, their own AI. If you build for that world, you will find the money.

We also had 5 investors pitch us on what they are looking for right now. From student-run funds to people looking to buy boring manufacturing businesses. It was refreshing to hear exactly what they want.

I recorded the full session with Dan and the investor pitches. If you want to hear the raw, unfiltered version, watch it here.

[LINK TO YOUTUBE VIDEO]

✅ If this was useful, pass it on. You know a founder who is still building generic AI wrappers for 2023. Send this to them. Show them where the money is actually flowing.

(👉 Vote now — we’ll share the results in next week’s issue. All votes are anonymous.)

(Last week’s poll results)

👉 OpenAI is buying "memory." Nvidia is building labs with Pharma. The giants are finally taking healthcare seriously. Does a startup still have a chance to win the platform war, or are we all just building features for Microsoft now?