HSBC Innovation Banking Term Sheet U.S. Financings Guide finds Mega-Rounds Surge While Core U.S. Venture Terms Stabilize

New York, NY — 14 May 2026 — HSBC Innovation Banking today published the Venture Term Sheet U.S. Financings Guide 2026, an annual benchmarking report that defines market standards for U.S. venture term sheets.

The findings show a market moving at two speeds as U.S. venture investment surged above $300B in 2025, with capital increasingly concentrating into mega-rounds. Raises of $1 billion or more accounted for 35 percent of VC dollars last year.

Despite the recent AI wave concentrating capital at the top, the guide finds the core architecture of venture terms has remained remarkably steady. While AI-native companies are nearly 10 times as likely to raise an up-round versus a down-round (vs ~five times for non AI), cap table structures—including option pool sizing and employee ownership patterns—look broadly consistent across AI and non AI companies.

“What’s striking in this year’s data isn’t just where momentum concentrated, it’s how durable the underlying framework has been,” said David Sabow, HSBC Global Head of Innovation Banking. “Despite a market reshaped by AI, the core architecture of venture terms has remained remarkably consistent. That structural continuity is what keeps the market investable across cycles, regardless of where the next wave of capital flows.”

General Market Standards are Emerging

The U.S. financings guide finds that while funding has become more selective, the building blocks of most U.S. venture term sheets have become fairly consistent.

• Cleaner exit economics are most common: 1.0x liquidation preference dominates (93 percent), typically non participating (86 percent) and pari passu seniority (79 percent)—meaning most deals favor a straightforward structure rather than stacked, investor heavy outcomes.
• Early fundraising often stays lightweight: nearly one third of financings below $5M use SAFEs, helping companies move quickly before stepping into more formal priced rounds.
• Larger rounds trigger more complexity: 90 percent of $5M + rounds are priced preferred equity, so founders should expect more detailed terms around governance and investor protections.
• Employee ownership remains a consistent priority: two thirds of rounds create or expand the employee equity pool, most commonly 10 to 20 percent, reinforcing that hiring and retention are still being “priced in” across the market.
• More rules as companies scale: liquidity-related provisions show up in nine out of 10 later-stage deals, reflecting that expectations around exits and share sales become more defined as companies mature.

Variation among investor type

The guide also highlights meaningful variation by investor type and geography that founders should factor into their negotiations:

• International lead investors are more likely to seek downside protection via senior liquidation preference.
• Corporate VC is less likely than traditional VC to include ROFR for secondary shares.
• Investor type and geography drive measurable differences in downside protection and control terms.

The report’s findings are pulled from a comprehensive dataset of more than 500 anonymized, final, signed deals from Pre-Seed through Series C+, compiled in partnership with seven leading U.S. venture law firms.

Access the full Venture Term Sheet Compendium 2026 at: https://www.hsbcinnovationbanking.com/us/en/resources

Media Contact

Elena Connolly
US Head of Communications, CIB
elena.connolly@us.hsbc.com