Friends,
Before diving into this month’s newsletter, we are pleased to share that Heather Miles has joined the firm’s New York office as a partner in its Transactions Practice Group. Miles’ arrival enhances the firm’s capabilities across the Innovative Technology, Manufacturing, and Health Care & Life Sciences Sectors and supports the continued growth of Foley’s national corporate platform.
In last month’s newsletter, we highlighted how artificial intelligence (AI)‑driven growth is pushing late‑stage startups toward venture debt to fund infrastructure while preserving equity, and how a wave of mega‑initial public offerings (IPOs) is concentrating liquidity in top companies and accelerating the secondaries market’s institutionalization.
This month, we examine how private equity value creation is being reshaped by AI, automation, and robotics amid a prolonged exit slowdown, as well as how a widening gap in software market performance is redefining valuations, liquidity pathways, and investor expectations.
Extended hold periods and constrained exit markets are pushing sponsors to move beyond traditional financial and operational engineering, with AI increasingly embedded at the core of value creation strategies. Across portfolio companies, AI is shifting from experimentation to implementation, automating repetitive workflows, optimizing cost structures, and driving more durable margin expansion in an environment where sponsors may need to hold assets longer than originally underwritten. At the same time, diligence practices are evolving in step with this shift, with heightened focus on data provenance, regulatory exposure, cybersecurity risks, and technical talent retention. As sponsors recalibrate for a slower exit cycle, those treating AI as a foundational transformation lever, rather than a one-time efficiency tool, are positioning themselves to deliver more resilient outcomes.
In parallel, the software market is fragmenting into two distinct tracks, with valuation premiums increasingly concentrated among a narrow cohort of AI-aligned, high-growth companies while the broader market contends with slowing growth and multiple compression. Public market benchmarks show a stark divide between top-performing platforms and the majority of companies growing below historical thresholds, reinforcing greater selectivity among both strategic and financial buyers. As a result, traditional liquidity pathways remain constrained: IPO markets are largely limited to AI-centric issuers, merger and acquisition (M&A) processes are more disciplined, and secondaries have emerged as a primary avenue for partial liquidity. Together, these dynamics point to a more bifurcated and fundamentals-driven environment, where credible AI positioning is becoming central to both valuation support and exit optionality.
As always, please do not hesitate to contact us if we can help you brainstorm solutions to a legal or business challenge or connect you to a potential investor, professional, or entrepreneur.
Spotlight on The CFO Playbook for Value Creation in a Volatile Market
The CFO Playbook for Value Creation in a Volatile Market | May 14, 2026
Foley participated in a closed-door executive session at the Open Future Forum, The CFO Playbook for Value Creation in a Volatile Market, bringing together a select group of chief financial officers (CFO) and senior advisors for a focused, peer-driven discussion. The program created space for candid dialogue around practical strategies to drive enterprise value in today’s environment, including approaches to earnings before interest, taxes, depreciation, and amortization (EBITDA) growth, operational alignment, AI strategy, exit readiness, and capital efficiency, all within a highly curated setting designed to foster meaningful connection.
The discussion highlighted the evolving role of the CFO as a central driver of business performance, with participants sharing perspectives on value creation, capital discipline, and the growing importance of AI in finance. A key takeaway was the shift in the CFO function beyond traditional reporting and cost management toward enabling better decision-making, allocating capital effectively, building scalable foundations, and supporting long-term value creation amid ongoing market uncertainty.
Events
Upcoming:
Unlocking Liquidity: Secondary Markets & Alternative Exit Strategies | June 9, 2026
Foley is excited to host an intimate, small-format reception and panel designed for founders and investors to engage in a focused discussion on the expanding role of secondary markets in today’s private capital landscape. The program will feature a candid, practitioner-led conversation covering how secondary transactions are structured, evolving pricing and valuation dynamics, and liquidity pathways for founders and employees, alongside investor perspectives on portfolio management and regulatory considerations shaping the market.
SF World Cup Watch Party | June 11, 2026
Foley is proud to join Origin Ventures, Pilot, and Customers Bank in hosting a coast-to-coast World Cup watch experience, bringing together founders, investors, and operators across multiple cities for the inaugural 2026 match between Mexico and South Africa. Designed as a synchronized, invitation-only gathering, the event will connect local startup communities through simultaneous watch parties, combining shared live moments across host cities with a relaxed environment featuring food, drinks, and conversation. The program will create a unique opportunity to build relationships and foster connections across the venture ecosystem while celebrating a global sporting event together.
YC Founders on the Bay | June 19, 2026
Foley, alongside You.com and Silicon Valley Bank, will support an intimate, two-hour evening on the Bay designed specifically for YC founders, bringing together current batch participants, alumni spanning pre-seed through Series C, and members of the broader YC community for a relaxed, connection-driven gathering. The event will be deliberately unstructured, no pitches or formal agenda, allowing for open conversation and peer engagement, complemented by drinks, light fare, and a free-flowing atmosphere throughout.
Recent:
IPO Summit 2026 — Nasdaq MarketSite | June 1, 2026
Foley served as a presenting partner for a Sidebar Summit event held at the Nasdaq MarketSite in Times Square, where technology leaders, investors, and entrepreneurs gathered for an afternoon of candid discussion, strategic insight, and high-caliber networking. As part of NY Tech Week, the program convened a curated cross-section of the innovation ecosystem in one of finance’s most iconic venues, creating a dynamic forum for thoughtful dialogue around emerging trends and market opportunities while fostering meaningful connections among founders and capital allocators at the forefront of the tech landscape.
Founders & Funders: VC Reverse Pitch | May 28, 2026
Foley supported a curated evening event that brought together founders and investors for a high-signal networking experience centered on live venture capital (VC) pitch sessions. Designed to foster meaningful connections, the program convened early-stage founders and active investors in a structured format that combined open networking with presentations from VC firms outlining their investment theses, target sectors, check sizes, and founder evaluation criteria. With a highly selective attendee list focused on Seed and Series A companies actively raising capital, the event was structured to drive actionable outcomes while creating space for continued dialogue and relationship-building before and after the pitch program.
Hard Things | May 28, 2026
As part of the invite-only series co-organized by Foley and Mavka Capital, the event convened founders, investors, and ecosystem leaders focused on Physical AI, the shift from cloud-based intelligence to systems operating in the real world — spanning robotics, autonomous systems, AI-powered manufacturing, and edge computing. Held in an intimate setting in Palo Alto, the program featured Touraj Parang, President and Chief Operating Officer (COO) of Serve Robotics, whose experience scaling high-growth ventures and navigating exits anchored a discussion centered on what it truly takes to build, deploy, and scale technologies at the frontier of embodied AI.
Business Owners’ Forum | May 20, 2026
Foley, alongside Bernstein Private Wealth Management and Premara Group, hosted a curated, in-person forum in Salt Lake City for business owners actively considering a transaction. The program brought together a select group of founders at similar decision points for a highly discussion-driven exchange, blending peer-to-peer dialogue with insights from experienced operators who have navigated successful exits while also offering practical perspectives on M&A structuring, pre-sale planning, and current investor expectations from private equity and venture capital professionals; intentionally limited in size to promote candor and depth, the forum created a distinctive setting for open conversation, meaningful connection, and actionable insight for those preparing for potential liquidity events.
General Counsel Lunch Series: Securing AI Agents | May 15, 2026
Foley hosted its GC Series lunch in Palo Alto, bringing together general counsel and chief legal officers for a focused discussion on the evolving governance and risk challenges associated with agentic AI. Moderated by Kelly Boyd, the session featured insights from Peter Stockburger and RingCentral’s Michael Machado, who examined emerging frameworks for security, oversight, and accountability as AI systems move toward greater autonomy. The discussion emphasized practical considerations such as access management, agency liability, and the diminishing role of human-in-the-loop controls, using real-world examples to ground the conversation while fostering candid, peer-driven exchange among legal leaders navigating how to structure governance in a rapidly advancing technological landscape.
GreekUp | May 12, 2026
Foley hosted GreekUp in its Boston office, bringing together more than 150 founders, investors, and industry leaders for a flagship gathering that spotlighted the expanding impact of the Greek innovation ecosystem on a global scale. Organized by the Hellenic Innovation Network, the program included a startup panel focused on next-generation Greek deep tech and a fireside chat centered on building globally competitive companies, along with a special recognition of the Consul General of Greece for his contributions to strengthening cross-border innovation ties; the evening paired substantive discussion with a networking reception, creating an environment for meaningful connection among participants across entrepreneurship, investment, and international collaboration.
TIDE Milken Reception | May 5, 2026
Foley, in collaboration with The Investment Diversity Exchange (TIDE), returned to Milken Week with its signature reception, an invite-only gathering that has become a fixture of the week’s unofficial programming. Thoughtfully curated for senior institutional investors, the event provided a private, off-the-record setting that encouraged candid dialogue and meaningful connections, taking place alongside the Milken Institute Global Conference, the Institute’s flagship annual convening of leaders across finance, business, technology, health, philanthropy, and public policy.
Agents of Change | May 5, 2026
Foley supported Agents of Change, Boston’s annual half‑day summit that convened more than 200 founders, investors, and ecosystem builders committed to advancing a more equitable startup landscape in a highly interactive, peer-driven format. The program featured small-group table discussions, shared insights, and a fireside chat with Margaret Low, chief executive officer (CEO) of WBUR, alongside the presentation of the Change Agent Award, while addressing key themes such as evolving fundraising dynamics, alternative capital sources, AI-enabled efficiency, customer acquisition, and sustaining diversity, equity, and inclusion (DEI) commitments. Through structured networking and collaborative dialogue, the summit fostered meaningful connections and expanded participants’ reach across the innovation ecosystem.
Thought Leadership
AI, Automation, and Robotics Are Reshaping Value Creation for Private Equity
The private equity playbook that once relied on financial engineering and operational discipline is being fundamentally reshaped by a prolonged exit slowdown, mounting limited partner (LP) pressure on distributions to paid-in capital (DPI), and a backlog of deals with no clear path to market. In this environment, AI, automation, and robotics have quickly evolved from experimental initiatives to core drivers of value creation, forcing sponsors to rethink how they diligence, operate, and ultimately position portfolio companies for exit. As deal teams shift their focus to data rights, regulatory exposure, cybersecurity, and talent retention, a new reality is emerging, one where technology capability is not just an upside lever but a baseline expectation baked into valuation. Louis Lehot explores how that shift is playing out in real time, why traditional strategies are no longer sufficient, and what separates the sponsors who will generate durable returns from those left explaining missed outcomes.
Investing in AI Infrastructure: Beyond Data Centers
The next phase of the AI boom is no longer defined by headline-grabbing startups but by the massive, interconnected infrastructure required to make the technology work at scale, creating a sweeping new opportunity set for private equity. With trillions projected to flow into data centers, power, connectivity, chips, and edge computing, sponsors are moving beyond single-asset bets toward vertically integrated platforms that tie these components together into unified systems. But with that opportunity comes complexity: coordinating capital-intensive investments across multiple sectors, navigating layered regulatory regimes, and managing structural and governance challenges that can ripple across an entire platform. Louis Lehot and Natasha Allen share how leading firms are approaching this shift; why infrastructure, not just innovation, will define the next era of AI value creation; and what it takes to build, scale, and ultimately exit these next-generation platforms successfully.
QSBS Stacking: Leveraging Gifts and Trusts for Additional Section 1202 Exclusions
Section 1202’s qualified small business stock (QSBS) exclusion remains one of the most powerful, and increasingly scrutinized, tax advantages available to founders and investors, but unlocking its full value requires far more than simply holding eligible shares. As exit valuations rise and gains exceed statutory caps, sophisticated planning strategies such as “QSBS stacking” have emerged, using gifts and carefully structured trusts to multiply exclusions across taxpayers. Yet these approaches introduce a complex web of tradeoffs, from loss of control and gift tax exposure to evolving Internal Revenue Service (IRS) scrutiny, timing risks, and administrative burden. Jason Kohout and Stephanie Derks break down the mechanics behind these strategies; explore the nuanced considerations across outright gifts, spousal lifetime access trusts (SLANTs), incomplete non-grantor (ING) trusts, and charitable vehicles; and highlight why proactive structuring, well in advance of a liquidity event, can mean the difference between partial relief and significant tax-free outcomes.
Deals
Foley Represents Mirantis in Sale to IREN for $625 Million in IREN Stock
Foley represented Mirantis, a provider of cloud infrastructure, Kubernetes-based orchestration, and enterprise support services, in the negotiation of a definitive agreement to be acquired by IREN Limited.
Foley Advises Preva Aesthetics in Partnership with Alpha Aesthetics
Foley represented Preva Aesthetics, a premier aesthetics practice led by Michelle Paty, MSN, CPNP-AC, FNP-C, in its partnership with Alpha Aesthetics Partners, a leader in the medical aesthetics specialty and a portfolio company of private equity firm Thurston Group.
Foley Represents Origin Ventures as Lead Investor in Seed Round for Century Health
Foley represented Origin Ventures as lead investor in the $5 million seed funding round for Century Health, a pioneer in applying AI to real-world clinical data to accelerate research. Additional investors included InnovateHealth Ventures, 25madison, Next Play Ventures, 2048 Ventures, Alumni Ventures, and strategic angels.
Foley Represents Mayville Engineering Company in $100 Million Public Offering
Foley represented Mayville Engineering Company (NYSE: MEC), a leading value-added provider of design, prototyping and manufacturing solutions serving diverse end markets, in its underwritten public offering of 5,000,000 shares of common stock at a public offering price of $20.00 per share, for total gross proceeds of $100 million. This includes the exercise in full by the underwriters of their option to purchase up to an additional 652,000 shares of common stock in the offering.
Foley Guides Kontoor Brands in Agreement to Sell Lee® Business to Authentic Brands Group
Foley is serving as the legal advisor to Kontoor Brands, Inc. (NYSE: KTB) in its sale of the Lee® business to Authentic Brands Group.
Foley Represents EMS, a Wynnchurch Portfolio Company, in Acquisition of American Metal Supply
Foley represented EMS, a value-added distributor of aluminum products and a Wynnchurch Capital portfolio company, in its acquisition of American Metals Supply, a distributor of aluminum products serving the patio and industrial end markets.
Foley Advises Carna Health on Partnership with Renalytix to Advance Kidney Disease Management
Foley served as intellectual property counsel to Carna Health, an AI-enabled digital health company revolutionizing chronic disease prevention, in its partnership with Renalytix PLC (LSE: RENX) (OTCQB: RNLXY) to advance a novel, integrated approach to chronic kidney disease (CKD) management.
Foley Represents Samsung Ventures as Investor in $35 Million Series C Funding for XBOW
Foley represented Samsung Ventures as an investor in the $35 million Series C round for XBOW, the leader in autonomous offensive security. Additional investors included Accenture Ventures, DNX Ventures, Liberty Global Tech Ventures, NVentures (NVIDIA’s venture capital arm), and SentinelOne S Ventures.
Foley Advises Kids2 on $225M Credit Facility Led by Bain Capital
Foley served as legal advisor to Kids2 in connection with a $225 million senior credit facility to support global growth and expansion for which Bain Capital’s Private Credit Group acted as sole lender and administrative agent.
Foley Advises Crown Affair in Series C Investment Led by Stride Consumer Partners
Foley served as legal advisor to Crown Affair — an emerging luxury haircare brand recognized for its clean, high-performing formulas and emphasis on thoughtful haircare rituals — in its Series C investment led by private equity firm Stride Consumer Partners.
Foley Advises Apricus Generation on Launch of HK Power, a New Distributed Energy Platform
Foley advised Apricus Generation in connection with the launch and capitalization of HK Power, a newly formed distributed energy developer focused on acquiring and developing large distributed generation-scale solar, solar-plus-storage, and standalone storage projects across the United States.
Foley Advises Imad Ventures on Investment in Neuron Factory
Foley served as U.S. legal advisor to Imad Ventures on its investment in AI-native pre-construction platform Neuron Factory.
Foley Advises Alma in Acquisition by Spring Health
Foley advised Alma on the health care regulatory approval process and diligence in connection with its acquisition by Spring Health.
Additional Articles of Interest
Foley Expands New York Corporate Team with Addition of Partner Heather Miles
When the Ground Moves Beneath Your Feet: Notes from a PE-Backed CFO Forum
Securing the Agentic Future: A GC Lunch Series Discussion
What We Took Home From Milken Week
From Punchline to Platform: Hard Things Round Two and the Real History of Robotics
Author
Louis Lehot
Partner, Venture Capital
Silicon Valley | San Francisco | Los Angeles