2024 US Election Takeaways for Startups
Uncertainty is the only certainty at the start of any new presidential administration. But here are some trends to watch and actions to consider.
It’s been one month since our US elections. Founders and startups in our community are hungry for concrete answers when it comes to policy and politics.
Uncertainty is the only certainty at the start of any new presidential administration. Regardless of whichever party has won.
We hear you loud and clear. You’ve sent us questions on visas for tech talent, the direction of federal oversight on AI, the fate of the Inflation Reduction Act, and much, much more. There are policy risks to get ahead of, as well as opportunities to shape policy discourse.
We’re at the start of a potentially dramatic sea change in public policy that impacts tech innovation and startups. Not just federally but also at the state level. This is a time to engage, be vigilant, and, most of all, work together to amplify the next generation of startups scaling for a new era.
An early high-altitude snapshot of post-election takeaways follows.
TLDR
The Trump transition team is currently focused on personnel placement.
Policy priorities are being shaped right now in light of narrow Republican majorities in the House and Senate.
States will be important actors in policy development on AI and other emerging tech - this is true for both red and blue states, although areas of focus will likely differ.
The best government engagement strategy for startups involves relationship building, storytelling, and innovating responsibly in good faith. These efforts can be resource and time-efficient consistent with the constraints of startup life.
Startups have several platforms – including RIL – to cut through the noise and educate elected leaders in Washington DC and capitals across America. If you’re unsure of whether – or how – to work with federal or state governments, we’re happy to workshop how you might constructively engage with government partners.
The Landscape in Washington
Republicans will focus on budget reconciliation to advance their policy priorities. Simple majorities in both chambers can pass a particular policy involving a fiscal/budget impact (and avoid the Senate filibuster). It’s a tough process to execute, given the parliamentary rules involved. Disregard the initial headlines you read. Not all policies discussed will make their way into reconciliation packages.
Bipartisanship isn’t dead (yet). Bipartisan cooperation may occur. But it’s too early to tell whether bipartisan majorities will pass any major legislation. Look for bipartisan dialogue with respect to enhancing American competitiveness with China, populist economic ideas from the Trump agenda, child safety, and must-pass legislation (e.g., NDAA, the Farm Bill potentially, etc.). There’s a window for action on immigration, but it will be narrow and fleeting.
Taxes, immigration, tariffs, energy, and geopolitical competition are early priorities for both the Trump administration and Republican Congress.
Taxes: An early priority for Republicans will be reauthorizing (or expanding) expiring Trump tax cuts enacted in 2017. A major point of debate among Republicans is the extent to which tax cuts will be partially or fully paid for by spending cuts elsewhere.
Tariffs: The incoming administration is already signaling an openness to increase tariffs on China, Mexico, and Canada. It remains to be seen whether these higher tariffs will come to pass or are merely the start of negotiations between the US and our trading partners.
Immigration: Early executive actions focused on the southern border are expected. It’s unclear whether visas for tech talent will conflict with wings of the Trump administration that want to curtail immigration entirely.
Geopolitical Competition: China will continue to be the dominant foil for just about everyone in Washington. Expect energy production to feature in this story.
Be wary of people claiming access and influence with respect to Trump world. Competing ideological factions exist in any new administration. We will begin to see in the coming months which wings of the new administration and Congress flex their muscles.
Trends Startups Should Watch
AI will continue to develop in the near term without federal regulation. There is very little to deregulate further. To date, federal AI policy has focused on voluntary commitments from large players. We’ll be shocked if President-elect Trump doesn’t revoke the Biden executive order on AI on his first day in office. Many – if not all – of the large frontier model developers will continue on their current trajectory given the EU AI Act and other pressures from enterprise customers. Don’t be surprised if much of the federal government’s AI work underway lives on in federal agencies through issue-specific rulemaking (e.g., health, fintech), agency procurement (e.g., Defense), and other government processes.
Look to the states when it comes to AI legislation. California will almost certainly see many bills be introduced and discussed following the failure of SB1047 earlier in 2024. Colorado is exploring updates to its AI Act. And it’s not just so-called “blue states” – Texas legislators are developing AI legislation as well. Patchwork rules are likely to emerge in the absence of federal legislative action on AI.
Market mechanisms will drive responsible AI practices. Large enterprises will begin to shape responsible AI practice through their procurement and standard-setting power. A new generation of startups is setting out to uplevel responsible AI through products and services. We expect to see calls for greater transparency to help market actors assess AI models and applications.
Immigrant tech talent will be in tension with hard-line immigration voices. President-elect Trump has aligned himself with specific tech moguls and heavily emphasized out-competing China. He also ran his campaign vehemently arguing against most forms of immigration – legal and illegal. Startups cannot take for granted that these views will be reconciled in favor of bringing more tech talent into the US.
Regulatory capture remains a real risk. Big Tech lobbying continues to be a force. In the name of competing with China, there’s a path for large tech incumbents to continue dominating policy making, notwithstanding deteriorating popularity. Another form of regulatory capture looms. This time, the capturing could be achieved by the same tech voices close to Republican majorities and the incoming Trump administration.
Little Tech is a cute name, but still politically weak. Startups must organize and use their voices now more than ever. Most Members of Congress don’t know where to start to meet startups. They hear from large venture capital firms. And they certainly hear from Big Tech. A small number of VCs (who often fight with each other), the NVCA (which will focus on carried interest for VCs), and other emerging hyperscale startups cannot be relied upon to prioritize the startup ecosystem.
Who is DOGE working for, and what will the impacts be for the startup ecosystem? There is a tremendous opportunity for the DOGE “advisory council” to recommend improvements to government efficacy. Will those recommendations become legislative reality? Will there be cuts to spending such that startups, R&D, and other ingredients of tech success will be collateral damage? It will be interesting to see what the Musk/Ramaswamy DOGE effort implies for American innovation and startup competitiveness. We’re hopeful there will be a serious bipartisan conversation about improving service delivery and results for the American people.
Actions Startups Can Take Now
Update your talk track for this era of American politics. Every startup should take a fresh look at its public narrative. First and foremost, maintain your true north and most closely held values. Startups can consider amplifying how their company supports American competitiveness, American workers, and/or national security. Startups can consider using their voices to talk about what they need to win, including talent (domestic and immigrant), a level playing field, and a supportive federal government in multilateral settings.
Pursue low-cost interventions to get to know your elected representatives. Invite your state representative, member of Congress, and/or your US senators to your offices. Introduce yourself and what you’re building - before you need something. Share your candid thoughts on how policy makers can support you. Tell them how you are proactively innovating for the common good.
Use your voice directly or engage through intermediaries like RIL. I spent time in Washington in October. Both parties want to hear from startups and learn what startups are doing to advance the economic and human well-being of the American people. They concede that Big Tech dominates the conversation, but don’t have the bandwidth nor know how to reach large numbers of startups. If you can’t show up directly, organizations like RIL exist to help relay what we learn from you.
Avoid the polarization that plagues too much of American life. American early stage tech is a critical engine of our economy. We’re past the 2024 election. We saw more polarization than in previous cycles with respect to early stage tech. Big Tech is the only winner when startups and investors engage in partisan squabbles publicly. This is a time to find common ground and demonstrate that startups are capable of leadership.
Lead with your version of responsible innovation. The reality is that tech is distrusted. Much of this distrust is because of decisions Big Tech made when they were hyper-scaling. Big Tech’s irresponsibility is not the fault of startups, but it is our collective problem. Adoption of AI is a timely case study. Workers are scared of losing their jobs. Enterprise customers aren’t sure whether the hype meets commercial reality. Americans across the country don’t trust what the AI hype cycle is selling. Don’t wait for someone in government to tell you what to do. Or create the impression that you don’t care about the impacts of your tech on the American people. Startups are capable – with help from RIL and many others – of ensuring that their practices align with the story of responsible innovation that makes sense for your company’s stage and sector.
RIL’s Priorities
Everything we do is to help founders scale startups into enduring companies. Working with governments is an essential job for companies of consequence.
Part of RIL’s mission is to engage with policy makers across the political spectrum – and help startups do the same.
We believe permissionless innovation is inextricably linked to startups leading proactively and innovating responsibly. We will continue using our voice to promote startups, responsible innovation, and a level playing field that is not skewed in favor of Big Tech.
We’re building bipartisan relationships in Washington DC, California, and across the US. We’re connecting founders, operators, and investors in our network to leaders to provide both technical assistance and on-the-ground perspective.
RIL is here to help you build generational, enduring companies. We believe innovating responsibly is how you win and endure over the long run. Innovating responsibly doesn’t mean being perfect, nor does it mean zero risk. But it does involve an approach that demonstrates to customers, the public, your own team – and, yes, regulators – that you acted in good faith to build with care and intention.
RIL is here to help. Reach out to us and your trusted advisors to get ahead in this moment of regulatory and geopolitical uncertainty.