What Trump’s first 100 days have meant for corporate investors

The first 100 days of Donald Trump’s second presidency have had an immediate and dramatic impact in many areas, like world trade, US immigration, stock markets and DEI policies. But investors are to some extent still waiting for the full impact to hit.

Over the past few weeks we have been gathering feedback from corporate investors on how they have been affected, or what they are anticipating. Here is what we have so far. (If you would like to add your thoughts or perspective, please get in touch with us).

Healthcare

Healthcare investors are among those that are the most worried about what Trump’s federal funding cuts might mean. Job cuts at the Food and Drug Administration (FDA) and at the Centers for Medicare & Medicaid Services (CMS) will mean delays for decisions on drug and funding approvals. If these go from months to years, it could be a “company killer” for small healthcare startups on lean budgets.

Meanwhile, cuts to the budget at the National Institutes of Health will mean less basic research and fewer grants available for early-stage companies that are highly dependent on this kind of non-dilutive funding.

Universities, too, are feeling the pinch from cuts to grant funding. Tech transfer offices are often funded from so-called indirect funds that universities receive from the federal government. If these are now pulled or pared back, it will become slower to commercialise the research.

“In 10 years from now, the number of new drugs on the market might actually go down,” says Stephen Susalka, CEO of AUTM, the US association of technology transfer offices.

Universities are pre-emptively trying to ramp up their own investment funds, so they can improve the commercialisation pipeline and provide funding options for spinout companies, even if grant funding dries up.

Hardware

On tariffs, it’s hard to know what the rules are on any given week but hardware investors, in particular, are worried about the impact. Hardware startups will likely have to secure bigger funding rounds and eke those out longer in order to buffer against potential charges or the need to relocate production. Software startups are less directly impacted, but no investor likes the uncertainty. Plus, with the stock market still spooked, IPOs are on hold for everyone.

Canadian startups

Outside of the US, though, Trump’s action plan is having a galvanising effect on many markets. Canadians, angered by the rhetoric about making their country the 51st US state, are looking for new ways to support their domestic startups. More Canadian VCs, corporate and otherwise, appear to be investing in the domestic ecosystem now.

Initially, both founders and startups were paralysed by the shift situation, says Talia Abramowitz, managing partner at Deloitte Ventures. “I think there’s now a realisation, after three months of not knowing which way is up, this is the new normal.

European defence

In Europe, defence investment is booming as the continent re-arms and adjusts to a more uncertain military alliance with the US. There is a host of new defence startups emerging in the region, some of them benefitting from the live testing they can have on Ukraine’s battlefield.

Big defence contractors are becoming increasingly eager to partner with these startups and a new crop of accelerators and venture builders are being set up to help startups break into the tightly-knit world of military technology.

Climate tech

Since Donald Trump took office on January 20, some $12.2bn of investment in climate tech projects has slowed down or been cancelled according to estimates by The Big Green Machine, a database that tracks investments in the climate tech supply chain. It is not yet clear what will happen with the Inflation Reduction Act (IRA) which boosted sustainability investment in the past two years, and climate investors are wary of committing before more is known.

But this is good news for European climate startups, because many of the investors who were tempted over to the US by the IRA are now flocking back to Europe. Climate investors have become much more aware of a need to have a geographically diversified portfolio, says Markus Moor, senior partner at Emerald, a climate tech venture capital firm that has corporate limited partners.

Impact investing

Impact investing is one area expected to suffer, given the Trump administration’s self-declared “war on woke”. Ordering government departments to end diversity, equity and inclusion (DEI) programmes was one of the first measures President Trump called for on assuming office. Such programmes have been voluntarily wound down by many private organisations, too.

But impact investors are so far proving surprisingly resilient. Many impact funds are tweaking the way they speak about their work, or the kinds of outcomes they emphasise — but they are carrying on with what they perceive as an essential mission.

“A shift in administrations in Washington, a shift in some sentiment across the country has meant folks are perhaps using different language than they could before,” ays Jason Robart, managing partner of Seae Ventures, a corporate-backed venture firm that focuses on US healthcare disparities. “But I don’t think there’s any perception that the needs that became really prominent, frankly, post-George Floyd aren’t still there.”