Business Insider (BI) observes that the startup community is hopeful that Elon Musk’s influence on Donald Trump’s administration will revitalize the tech industry and Silicon Valley, which are currently in a state of stagnation.
According to BI, Donald Trump is considering a role for Elon Musk in the White House. However, Musk has proposed establishing a “Department of Government Efficiency” (DOGE) and suggested removing regulations that have recently slowed mergers and acquisitions (M&A) in the tech sector.
Musk’s stance is generating significant excitement among startups and venture capital firms, as they anticipate more freedom to pursue M&A activities without regulatory constraints.
“With a major effort to eliminate unnecessary paperwork and overregulation in key areas, we could genuinely see a century of rapid innovation and incredible acceleration. I’m thrilled by Elon Musk’s efforts,” admitted Aaron Levie, CEO of cloud computing company Box.
Barriers
According to BI, regulations and policies have constrained Silicon Valley recently. Antitrust laws have blocked many mergers that the government feared could harm free market competition.
This has frustrated startups and venture capital firms, as M&A is one of their primary ways of generating returns. Venture capital firms seek profits by selling startups to major corporations, while entrepreneurs aspire to become millionaires or billionaires overnight. Large companies, in turn, acquire new technology or reduce competitive threats by purchasing startups before others do.
Attorney Louis Lehot from Foley & Lardner LLP notes that M&A is crucial for the flow of capital in the startup market. Without the option to sell to corporations, many investors would lose interest in supporting startups.
The U.S. government’s antitrust investigation of Google led the company to abandon two acquisitions this year. Similarly, Microsoft and Nvidia are also under investigation, even though they are pioneers in artificial intelligence.
Thus, Mason Angel, an expert at Industrious Ventures, hopes that Donald Trump and Elon Musk will help reduce corporate taxes and cut regulatory constraints to revitalize M&A activity in the startup sector.
Sharing this view, Ben Narasin, founder of Tenacity Venture Capital, believes that Musk, as a former entrepreneur, has a practical perspective and better understands the market.
“Elon Musk supports startups, supports businesses, and supports anything that benefits the American people. A healthy economy brings good things for everyone,” Narasin stated.
Positive Reactions
Donald Trump’s victory has sparked a surge in the stock market, which investors see as a positive sign, anticipating a revival of the tech sector.
Previously, the market had been constrained by high-interest rates and strict regulations, but many venture capitalists now look forward to a new, more positive shift, which will channel more funding into startups.
“I think the next four years will be filled with ambitious mega-projects and unprecedented visionary initiatives, from the mission to Mars to the dream of weather control,” said Augustus Doriko, founder of Rainmaker, with excitement.
Similarly, Mason Angel at Industrious Ventures believes that sectors like space, industry, and defense will experience strong growth due to Musk’s influence.
Other venture capital funds also share optimism that Musk will support the entire industry at the federal level, bringing prosperity for all.
