How will uncertain tariff policies impact tech startups and funding?

The world is also moving away from American companies. Startups in the US will not grow as fast. European and Chinese markets beat American markets last year, so capital is moving out of the United States.

Probably, harder to raise money or exit.

On the other hand, with lack of regulations, it might be easy to offload cost on to public. I suspect we will see a lot of scammy fintech, environment destroying projects, alternate medicines, and snake oils. I am actually excited and bullish on CRSPR and genetic editing tech.

Large uncertainty and instability in the markets is not a good environment for investment.

It’s worth keeping an eye on this come end of March.

https://fred.stlouisfed.org/series/GEPUCURRENT

Funding is a big concern – and startups are especially vulnerable since they don't have existing customers to help ride out almost everyone being hesitant about new costs at the same time – but one other factor I'd consider: for the entire history of computing, the world has generally been comfortable using American products. Almost everyone trusted Intel, AMD, Motorola, etc. to make their processors, trusted IBM, Microsoft, Apple, etc. to build their operating systems, gave Google the ability to automatically ship code updates to their desktops, and the U.S. tech industry has seen trillions in profits because of that. People didn't think the U.S. was perfect by any means but most people would have used terms like “rule of law” or “democracy” when describing us, and very few people worried about trusting American tech products (yes, there were some but they've been ).

Now _everyone_ else in the world is asking what happens if the Trump administration leans on an American company, or whether they even have to lean when the CEO is sharing a stage. Does an attack on Canada start with a Windows or Chrome update? Will CrowdStrike agree to ignore the NSA's exploit codes? Can a politically-connected insider get the CIA to help them beat a competitor? Will AWS turn off service if it's deemed strategically necessary, similar to how Ukraine's military capabilities were threatened to force them to accept a worse deal?

None of those questions have an affirmative answer so far, but everyone has to weigh the odds of something previously unthinkable actually happening and that is a new and quite disturbing place to be for someone launching a startup if you expect to have customers in other countries. Canadians appear to be taking the lead right now but there are many people in many countries who are not going out of their way to help the U.S. economy and startups are going to have to deal with that without an existing reputation or referrals to balance it out.

You ever invested in an Aluminum stock? How about lumber? You'll have no idea what exactly makes those stocks move up and down unless you know the financing of that industry. The idea that these things are going to move equities in random sectors is not real. The market wanted to take profits, and this was a perfect reason to do so.

The only trade war that could possibly exist is between the US and China, and that will always be saber rattling because neither authoritarians can truly control 350M/1BN people. It's a fuck around and find out situation and they wouldn't do it.

Trump has pals in these particular industries and he's squeezing out profits for them, that's all. It's not going to affect Snapchat meaningfully other than a sentiment trade. If anything, the argument can be made that Trump is playing into the market downturn to force the hand of Jerome Powell to drop rates faster. These people desperately all need to raise debt right now at lower rates, especially Elon.

Tariffs are the least of your problems for non hardware startups. The biggest funding impact is from a more conservative (small “c” conservative) stock market that isn’t hungry for IPOs of unprofitable companies and a global regulatory environment that makes acquisitions harder. The acquisitions that do happen will be at much lower valuations.

That means exits are going to be harder and VCs don’t see a light at the end of the tunnel.

As far as stock market performance, now is the time to buy when prices are lower. Trump won’t be in office forever and Democrats and sane Republican politicians - all of them except Trump - hate tariffs.