NXTGEN

The new U.S. administration has gone Founder mode. Let’s dive in.

What the new Administration means for early stage investing.

America is reinventing herself. New trade rules are being set and technology’s horizons will stretch even further. 

This is warp speed 2.0. Only this time the patient is the American economy.

If there was ever any doubt, that is long gone: the new U.S. administration is operating in founder mode. There is a complete reset taking place. Spending, government efficiency and digitalisation is front and center and there is a renewed focus on innovation as a cornerstone of economic and national security. The policy landscape is poised to reshape opportunities for entrepreneurs and investors alike. We are seeing technology playing an important role to secure national interests and propel economic growth. Some of the key areas we are likely to see impacted (which we unpack in more detail below) include the following: artificial intelligence (AI), defense tech, healthcare, blockchain, public spending and government efficiency. Plus the future of finance will be shaped in an entirely different way.

Base Case for Why Tech Matters

Technology remains a linchpin of global competitiveness, contributing an estimated $2.3 trillion to U.S. GDP in 2024, according to the Bureau of Economic Analysis. And when looking at the S&P 500’s total return over the same period, tech stocks alone contributed more than half of all returns (56.5%). The type of investments made now in the early stage space can significantly fuel this growth engine for years to come. No other nation understands this more and invests as much as the United States of America. Total Venture capital (VC) deployed globally approximated $286 billion in 2024, with funding to U.S. startups alone equaling $185 billion in 2024 (nearly two-thirds of global total VC investment!). Managed well, the new administration’s pro-growth agenda, centered on deregulation, tax incentives, and “Made in America” priorities, aims to amplify this momentum. Yet, the interplay of policy and market dynamics introduces both opportunities and complexities for investors.

AI Policy and Regulation 

The administration’s approach to AI balances innovation with oversight. We’re moving from the doldrum-beating concerns of “AI safety” to “AI opportunities”. 

A 2025 Goldman Sachs forecast projects U.S. AI investment to hit $250 billion by 2027, driven by enterprise adoption and defense applications. However, regulatory frameworks remain in flux. The establishment of a Presidential Working Group on Digital Asset Markets, announced in January 2025, is a welcome step forward for digital assets and also hints at a broader tech policy lens that may extend to AI. For early-stage firms, this could mean increased scrutiny on data governance but also funding opportunities tied to national priorities like cybersecurity. 

A 2025 McKinsey report also estimates U.S. SaaS revenues could grow 18% annually through 2030, fueled by AI integration, and so for SaaS based startups AI integration is expected to be an accelerator. 

Defense Tech 

Defense technology is surging, with the Department of Defense allocating $145 billion to tech R&D in its 2025 budget, up 12% from 2024 (Deloitte Insights). The administration’s emphasis on countering geopolitical rivals elevates dual-use technologies; those with civilian and military applications. Early-stage firms in autonomy, drones, and space-tech stand to benefit, though high capital requirements and long sales cycles pose barriers. Strategic partnerships with established contractors could accelerate market entry. Defense innovation is of paramount importance, and the private sector is playing more and more of a role in helping advance this innovation.

Healthcare 

Healthcare tech investments grew 15% year-over-year in 2024, reaching $34 billion, per Rock Health data. The administration’s deregulatory stance may ease telehealth and medtech approvals, fostering innovation in personalized medicine and diagnostics. Yet, potential cuts to public health funding could shift reliance onto private capital. Entrepreneurs with cost-efficient, scalable solutions, such as AI-driven diagnostics, will likely attract outsized interest.

Crypto Regulation and Decentralized Finance 

A stable regulatory framework for digital assets is emerging, with the SEC’s recission of SAB 121 in January 2025 signaling a friendlier stance. Cronos (backed by Crypto.com) recently launched direct crypto-to-card transfers, and this exemplifies how regulatory clarity can unlock use cases. The global decentralized finance (DeFi) market is projected to reach $507 billion by 2030 (Statista, 2025), broadening access to finance and reducing capital costs. Early-stage fintechs integrating blockchain with traditional systems could see accelerated adoption, provided they navigate compliance hurdles.

Tariffs and “Made in America” Tech

The proposed 25% tariffs on goods from Canada and Mexico, and with the broader reciprocal tariff strategy implemented by the new administration is a bold move. Whilst it aims to bolster domestic manufacturing, initial volatility could be dangerous in the short term. Although this could raise costs for hardware-dependent startups (for those that continue to import), it encourages a completely different approach to domestic manufacturing. For those who utilize AI and robotics, at the rate of innovation we are seeing, manufacturing tech, and an upskilled workforce, can greatly improve efficiency and overall cost effectiveness, improving domestic product and workers’ wages. Investors should target firms leveraging tariffs as a competitive edge, such as those enhancing supply chain resilience or automating production.

Strategic Insights and Forward-Looking Trends

The administration’s policies suggest a dual trajectory: robust support for tech innovation tempered by protectionist measures. 

Key growth drivers include:

1. Public-Private Synergies: Increased federal R&D spending, paired with VC capital, could shorten time-to-market for breakthrough technologies.
2. Sector Convergence: AI’s role across defense, healthcare, and finance underscores the value of a sector agnostic approach, but emphasizes management expertise, network and distribution channels for revenue growth.
3. Global Positioning: Tariffs may insulate U.S. firms from foreign competition, but export-focused startups must adapt to retaliatory trade barriers, and/or consider global growth initiatives with local partners.

Looking ahead, we anticipate an uptick in early-stage tech deal flow by mid-2026, driven by AI and defense tech, assuming stable macroeconomic conditions. However, investors must weigh risks: tariff-induced inflation could tighten capital markets, with the Federal Reserve projecting a 3.5% inflation rate for 2025 if trade policies escalate (Charles Schwab, 2025 Outlook). Diversifying portfolios across software and hardware, while favoring firms with domestic revenue streams, offers a balanced approach.

Our Final Thoughts

The new U.S. administration’s reset moment presents a significant opportunity for early-stage tech investing. By prioritizing AI, defense, healthcare, and financial innovation, while navigating tariffs and regulatory shifts, it sets the stage for sustained growth. For investors and entrepreneurs, the imperative is clear: adapt to policy tailwinds, leverage data-driven insights, and position for a future where technology not only drives profit but reshapes economies. The next five years will reward those who act decisively amid this evolving landscape.