The strong favorite of Silicon Valley, Biden is likely to reverse many of President Trump’s key policies affecting the innovation economy. He’s also likely to bring a measure of much-welcomed stability to the country’s leadership.
The startup community was likely relieved, too, to see that one of their own will be in the White House come 2021: Ron Klain, an attorney and longtime Democratic operative who now serves as EVP at venture investment firm Revolution, will serve as Biden’s chief of staff.
Here are six key issues where the startup community is most likely to see Biden’s impact:
• COVID-19: As of this writing, the COVID-19 pandemic has claimed more than 242,000 American lives, the U.S. has broken a new daily record of 160,000 new cases, and infection rates are surging alarmingly in 46 states, making new economic lockdowns all but inevitable. Biden and Vice President-elect Kamala Harris have made getting a handle on the virus their No. 1 priority because, as the president-elect has said repeatedly, we cannot truly begin to rebuild our battered economy until we’ve brought the pandemic to heal. Positive news about the chances of getting an effective COVID-19 vaccine to market in 2021 also means the Biden administration will be tasked with distribution of that vaccine next year.
• Immigration: Perhaps no Trump administration policy has more aggravated Silicon Valley than its hard-line approach to immigration. President Trump has moved to curb immigration of all sorts, including the influx of highly skilled workers who come to the U.S. on H-1B visas every year. Under Biden, expect to see a long list of policy changes and reversals, including removing country-based caps for employment-based visas and supporting the Stopping Trained in America Ph.D.s From Leaving the Economy (STAPLE) Act, which would provide fast-tracked green cards for foreign students who receive a doctorate-level degree in a STEM field and a job offer in the U.S. upon graduation.
Immigration matters not only for companies hiring skilled foreign employees. Immigrants also account for an outsized portion of the startup founders in this country. A 2013 study by the National Venture Capital Association found that one-third of U.S. venture-backed companies that went public between 2006 and 2012 had at least one immigrant founder. Another more recent study by the group found that immigrants helped found more than half of U.S. unicorn startups.
• Clean tech and transportation: We don’t yet have a clear view of what, exactly, Biden’s approach to energy and transportation policy will be, but the former vice president has said that under his watch the U.S. will rejoin the Paris Climate Accord and work to drastically reduce its greenhouse gas emissions. He spoke in the second presidential debate specifically about beginning to phase out carbon-producing industries like coal while putting significant federal resources into developing renewable energy sources like solar and wind.
As Crunchbase News columnist Joanna Glasner also noted in her most recent article, many of the cleantech areas that Biden talked about early on in his campaign, including more pedestrian-friendly infrastructure and electric cars, are sectors that the startup world is heavily invested in.
• China trade and foreign policy: The Biden administration will have a fine line to walk when it comes to dealing with China. While Trump relied on ineffective and disruptive blunt-force methods like tariffs, the new White House team will have to confront China’s trade antagonism while ensuring that American industries and companies don’t become collateral damage in the standoff. That likely will mean a departure from both Trump’s heavy-handed tactics and the Obama-era approach, which was criticized for being too soft on the Chinese government.
“President-elect Biden and his advisors have largely recognized that the Obama-era China strategy relied too heavily on the notion that cooperation and integration would yield positive changes in Chinese behavior,” the Information Technology Industry Council, an industry advocacy group for the tech sector, noted in a recent white paper on the Biden-Harris administration. “Coupled with congressional and China hawks’ rejection of this thesis, the Biden-Harris Administration will need to show that they can confront China where necessary and cooperate when possible.”
• Antitrust and regulation: Few tech-related issues have received bipartisan support, but antitrust regulation is one of them. Lawmakers on both sides of the aisle have indicated they’re interested in reining in the technology giants. Ironically, as I’ve noted before, some of the moves aimed at curtailing Big Tech—such as discouraging companies like Google and Facebook from buying smaller companies—may actually cause more harm than good for the startup industry.
Biden has already tapped former administration officials with experience in antitrust enforcement as he assembles his transition team. They include Gene Kimmelman, who served in the Department of Justice’s antitrust division under President Obama and is now an adviser at Public Knowledge, a tech policy group that advocated for the DOJ to bring its antitrust case against search giant Google.
“The question isn’t whether a Biden administration will be more aggressive, but how much more aggressive” on antitrust enforcement against the tech giants, Michael Kades, a former Federal Trade Commission lawyer who now serves as director of markets and competition policy at the Washington Center for Equitable Growth think tank, recently told Bloomberg Law.
• Taxes: Democrats are likely to push for higher taxes on high earners and businesses, including via increased capital gains taxes, but they’ll only succeed if they can wrest control of the Senate from Majority Leader Mitch McConnell. And that remains a big “if” that hinges on the outcome of swing-state Georgia’s January runoff election for the Senate.
Above all else, stability
On almost every policy stance, a Biden-Harris White House is likely to look starkly different from the Trump administration. But more than any single issue, Joe Biden offers the promise of stability and predictability.
As venture investor Bradley Tusk said in a recent interview with Protocol: “I think the thing that everyone would love—by the way, I think this is even true on the Republican side to some extent—is a boring presidency that’s relatively calm. Not the anxiety and chaos that we have with Trump every single day. I think people really want that. Look: Companies, investors, markets, they like predictability. Volatility is a problem.”
Yes, Joe Biden is kind of a boring guy. But after four years of disorder and confusion, that’s OK.
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Among Crunchbase News’ most popular articles last week:
- Reporter Sophia Kunthara did an analysis of how much it costs to take a company public via an IPO. What she found: Underwriting fees alone can cost $7 million for a $100 million IPO. And that’s before law firm and auditor fees that typically add millions more to the price tag.
- IPOs may be pricey, but that doesn’t seem to be a deterrent to the many companies that may still go public this quarter or in early 2021. Early last week, Sophia also spoke with investors and IPO experts on which companies we should expect to see go public in the coming months, and why the IPO pipeline is so robust as we head toward the end of the year. By the end of the week, DoorDash had also dropped its S-1 filing in preparation of a public-market debut and reports emerged that Instacart had engaged Goldman Sachs to lead a 2021 IPO.