The US government shutdown poses a threat to startups and IPOs.
Date: 2025-10-06 Author: Gabriel Deangelo Categories: IN WORLD
The US government shutdown, effective October 1, 2025, has already had a noticeable impact on the tech sector and the IPO market, according to TechCrunch. Experts on the Equity podcast, including Kirsten Korosek, Maxwell Zeff, and Anthony Ha, believe the current shutdown poses a more serious risk to startups than previous similar shutdowns. They believe it could slow down the initial public offering (IPO) market.
Startups closely involved with government contracts and regulated projects are particularly vulnerable. In recent years, tech companies' collaboration with federal agencies has increased significantly, particularly in the areas of artificial intelligence, automation, space technology, robotics, and climate initiatives.
TechCrunch also notes that several crypto companies are preparing for IPOs, including BitGo, Kraken, and Grayscale, while Circle, Gemini, and Bullish have already made their public debuts. Experts emphasize that the startup landscape has changed significantly over the past decade. While the primary focus was previously on the consumer internet, the number of companies in the defense and deep tech sectors is now growing, requiring more permits and approvals from government agencies.
Anthony Ha notes that the expanding influence of government is affecting an increasing number of startups, making their dependence on government decisions more critical than it was ten years ago. Furthermore, the Donald Trump administration is increasingly involved in high-tech and industrial companies, adding further complexity to private sector interactions with the government.
The funding situation is a consequence of the Senate blocking both funding programs, leading to the third government shutdown of Trump's presidency. The duration of the shutdown is still unknown, but the previous one, in 2018, lasted 35 days.
According to Polymarket, the majority of users predicted a 2025 shutdown: 76% had placed a corresponding bet, and 64% expected it before October 1. Despite this, the crypto market's reaction remained moderate, indicating that investors are still assessing the real consequences for startups and IPOs.
Thus, the US government shutdown has revealed new risks for tech startups and companies planning public offerings, highlighting the importance of government support and regulatory solutions for the sustainable development of the innovation sector.
