Like most Americans, those in the venture and startup industry will be watching the results of the U.S. presidential election next week, with a keen eye on who wins — and what it could mean for big industry issues like mergers and acquisitions, taxes and even crypto.
While the next American president won’t resolve solely on these issues, who is elected will likely have a major impact on regulations and tax changes that might have implications for industries from artificial intelligence to biopharma, from the largest Big Tech to start-up before the ovule.
Let’s take a look at some of the biggest issues that VCs and founders are almost certainly listening to as the presidential election approaches in just a few days.
Antitrust
By far the foremost issue that interests most investors – and even start-ups – is what the recent CEO could mean for the highly uncertain M&A market.
“Those are really important issues number one, two and three,” he said John Stanfordexecutive director of Hatcha coalition of life sciences investors based in Washington. “We need to get this (regulatory) environment under control.”
Amazonproposed to take over the company value $1.4 billion iRobot This is one example of a deal being rejected as a consequence of – in keeping with some investors – an overzealous regulatory environment for mergers and acquisitions, for which they blame Federal Trade Commission AND US Department of Justice.
Venture capitalists need exits for their firms in order to proceed investing. “When it comes to risk, winners pay losers,” Stanford said. “So you need those winning trades.”
However, M&A deals involving VC-backed startups have slowed over the past few years, Crunchbase data might be seen.
While the big deals that show up in reviews make headlines, other smaller, hidden deals fell through because they became dearer and deemed not value the money and hassle, Stanford said.
It is not known what will occur to regulations after the elections. While former President Donald Trump promised less regulation and exercised more presidential authority over the FTC, he has at times each supported some of the moves of the biggest tech players and been critical of the power they wield. However, fellow incumbent J.D. Vance has praised the FTC in the past for its reign on Big Tech.
And while many expect the same regulatory atmosphere to proceed if Vice President Kamala Harris becomes president, because she hails from Northern California, she also has close ties to friends in Silicon Valley and was capable of take heed to their concerns about regulatory agencies.
Nevertheless, VCs say they are losing liquidity as the variety of IPOs stays fairly stagnant and the M&A market is weak.
Crypto
Perhaps the most talked about startup industry in the run-up to the election was cryptocurrency.
The crypto community – which incorporates many startups and venture investors – disagrees with the federal government on what asset class cryptocurrency should consider. The question then becomes which government agency should oversee this, i.e KNOT or Commodity Futures Trading Commission.
Cryptocurrency supporters were also aggressive in 2024. Nearly half of all corporate money contributed to this yr’s federal election campaigns got here from cryptocurrency supporters, in keeping with a recent report from an advocacy group. Public citizen. In total, crypto corporations and wealthy investors contributed greater than $119 million on to the 2024 federal election.
While Trump has clearly been courting the cryptocurrency crowd (he has his own cryptographic project), the Harris campaign hasn’t issued any grand edicts on cryptocurrencies. However, the Biden administration was perceived as unfriendly to cryptocurrencies – especially the SEC chairman Gary Genslerwhich has taken a rigorous enforcement approach to cryptocurrencies.
“Even though we don’t really know how Harris feels about cryptocurrencies, she is courting the community,” he said Bradley TuskCEO and co-founder of the company Partners of Tusk’s venturea venture company investing in strictly regulated markets.
It was last week reported This Chris Larsenco-founder and president of the digital payment network Ripplehas donated greater than $11.8 million to PACs supporting Harris’ campaign.
“I think most people involved in cryptocurrencies just want to know who will replace Gensler,” Tusk said.
Taxes, biotechnology and more
While antitrust regulations and cryptocurrencies have dominated election news in the world of startups and ventures, there are more issues at play.
Stanford said many VCs are hoping the election winner will extend a provision of the 2017 Tax Cuts and Jobs Act that provided immediate tax deductions for expired research and development expenses – which could have a huge impact on startups that they often spend ten or more years simply developing a product.
Stanford said there are also concerns about health care provisions included in the recent Inflation Control Act that cap drug prices and their impact on future biotechnology/biopharmaceutical investments.
“In the future, investing in small-molecule drugs may bring less reward,” he said.
Tusk said he expects the federal government to finally issue interstate transportation guidelines on autonomous driving – something the current administration has not done.
Tusk added that, from a macro perspective, the venture world also needs to watch Trump’s promise to eliminate independence Federal Reserve — something that might have a significant impact on the economy as a whole.
At last
Regardless of the final result, the presidential election will likely be just one a part of a much larger pie that will impact ventures and startups.
Given that House and Senate margins are more likely to remain slim, passing major initiatives will likely remain difficult.
Tusk, whose company specializes in regulated industries, said it’s extremely essential to do not forget that most technology regulations are not implemented by the federal government.
“A huge amount of technical regulation occurs at the municipal and state level,” he said. “It’s not happening at the federal level. Really, things like governors are more important in this type of legislation.”
And while people wish to focus on a specific problem or cause and where a candidate might stand, Stanford found that the majority business people want the same thing. “As a company scales, it’s usually best if the government doesn’t get in the way,” he said. “Most investments will fail anyway. We don’t want greater government interference and uncertainty to make this work even more difficult.”