President Trump’s Anti-Regulation Policies Might Actually be Good for Tech StartupsPosted: January 25, 2017
‘I know, I know. But I’m begging you to read this till the end, and not take me out of context.’
Ashu Garg is a general partner at Foundation Capital, where he invests in B2B software across the stack. He currently serves on the boards of TubeMogul, Localytics, Conviva, ZeroStack and Yozio, among others. Reach him @ashugarg.
Ashu Garg writes: Well, it happened. I thought it was a joke when he started campaigning, and I was aghast when he was elected, but that’s all history at this point: Donald Trump is president. Rather than spend time on sour grapes, I think it’s more productive to make a clear-eyed appraisal of what his administration might mean for my industry. I know that what I say next risks being taken out of context, but from my vantage as a longtime tech entrepreneur and venture capitalist, I believe that there’s a real chance Trump will be — I’m begging you to read till the end and not take me out of context — good for startups.
“The most significant reason Trump might be good for early-stage companies is that he is very anti-regulation.”
First off, change in general is good for entrepreneurs, because it creates new circumstances for them to exploit or gaps for them to fill. Regulatory change, more specifically, is ripe with opportunity. Moreover, Trump has historically made a lot of pro-small-business noises, and has signaled that he will shake up the Small Business Administration.
Professional-wrestling magnate Linda McMahon is potentially taking over, and may be receptive to the type of changes that would allow emerging enterprises — in tech and outside it — to grow, including making it easier for first-time entrepreneurs to access startup grant funding.
“Trump has promised to make huge investments in infrastructure, largely to be funded by debt — for entrepreneurs, this will create enormous possibility.”
The most significant reason Trump might be good for early-stage companies is that he is very anti-regulation. The White House has already issued a freeze on new or pending regulations to all executive departments and agencies, for example. One can argue whether less regulation is good or bad for society. But it’s only good news for startups, which are always in a hurry to ship their ideas into the real world.
People I’ve spoken with in the health sector expect that the new administration will aggressively pare back FDA regulations, thereby opening the window for a lighter-weight process for health-care startups of all kinds — devices or drugs — to get their products to market. (I’m not arguing that this will necessarily be good for patients.)
Meanwhile, a more liberal policy on drones will make commercial applications of the technology easier to realize. This is a space that I’ve spent a good deal of time looking at as an investor, and where I happen to agree with FAA head Michael Huerta, who said, “We need … to stop moving at the speed of government.” If the regulatory burden is lifted, expect drone startups for everything from delivering pizzas, handling insurance claims, even herding unruly sheep to go mainstream.
Beyond regulations, Trump’s pick for…(read more)