What a second Trump administration means for local startup ecosystems

American politics are so divisive in part because the United States is such a big and varied place. 

Across the country, we face different challenges and so have different priorities. Meanwhile the web powers an information diet that spans the globe. Most of us are better informed on some minor outrage across the country than we are on a consequential issue in our hometown. 

This is why I’m so passionate about models sustaining local news. I’ve spent the entire of my 15-year journalism career building Technical.ly, in particular, because issues of economic mobility and entrepreneurship are similarly local and — better yet — effectively bipartisan.

After a heated presidential election, in which voters from both sides said protecting democracy motivated their choice ( and one side was ensnared in an actual assault on the Capitol), the United States could use more local stories that most of us can get behind. 

The Technical.ly newsroom is following the many local election results and far more specific stories affecting our community. Meanwhile, I reached out to a few leaders around the country who work on local tech, startup and innovation policy.

What will a second Trump presidency mean for entrepreneurship-led economic development?

What changes? Everything and nothing 

“Everything changed and nothing changed,” Brian Brackeen said of the election’s outcome. Brackeen’s the founder and managing partner of Lightship Capital, which he leads from Cincinnati, Ohio. 

With his wife and partner Candice, Brackeen was part of a small, if prominent, wave of Black investors who launched new venture capital funds following the murder of George Floyd in summer 2020. Brackeen’s politics have always been nuanced. He speaks publicly of and identifies with many  progressive social issues but is a repeat founder who has raised financing in hyper-capitalist and Republican-dominant states.

American entrepreneurship is at an interesting crossroads. Since 2020, business creation has surged, across demographic and geographic groups. It’s one reason the US economy has remained the envy of the world. In the 20th century, Republicans were associated with business, and Democrats more with workers. An optimistic reading says that tension contributed to American dynamism. 

As in so many other ways, Donald Trump, who will become in January the second president to serve a nonconsecutive term, has upended that convention. Prominent Silicon Valley innovators, like Elon Musk and Peter Thiel, backed him, but Democrat candidate Kamala Harris appeared to win a majority of high-income earners, while Trump did slightly better among people earning less than $100,000 a year. 

Where entrepreneurship-led economic development strategy falls as a priority with Trump may depend on specifics.

For example, Brackeen’s Lightship Capital is bidding for US Small Business Administration funds to invest in startups with founders from underrepresented backgrounds, especially those who are Black or Hispanic. It’s just the kind of SBA program that could be cut under a new Trump administration, which has signaled displeasure with other race-prioritized programs, Brackeen said. 

Over the last decade, programs focused on race-related economic outcomes have zig-zagged in prominence. The combative first Trump presidency swelled support for the Black Lives Matter, which hit its high-water mark within the pandemic. The Biden administration set about operationalizing many progressive activist’s policies. President Joe Biden signed a trio of spending bills putting trillions of dollars toward climate infrastructure, race-conscious economic policy and student debt relief. 

Then a series of court cases began clawing back race-based programs, including a prominent and ongoing legal fight between a conservative activist and the Atlanta-based Fearless Fund.

That may change again with a new Trump administration, Brackeen said. While the macro environment will shift though, he emphasized that early-stage entrepreneurs, and their supporters, must remain “laser-focused” on their customers. 

“When you work with founders, they need to stay on target for their mission,” he said, “regardless of who’s in office.”

Brackeen acknowledged political changes bring what he called “distractions” that can affect founders indirectly — whether through policy adjustments or broader shifts in economic sentiment. “You have to keep your eyes on the macro level but be incredibly micro-focused in execution,” he said.

‘If you make your work about jobs and growth, you’ll have support’

Maria Underwood, who recently led Alabama talent attraction nonprofit Birmingham Bound, noted that some founders will likely feel the effects of the election more than others.

“Women founders, Black founders, and those from under-resourced communities might see shifts in emphasis on gender equity or diversity in venture capital funding,” Underwood said. “Health tech, social impact, and other mission-driven founders will need to navigate new hurdles.”

Entrepreneurs often express their deepest-held passions with the companies they create. Hence separating their business priorities from their personal philosophies can be tricky.

“Most of the founders I work with are building something because they want to make a difference,” Underwood said. “When policies impact their ability to achieve that vision, it’s hard to ignore.”

That can be true for all local startup and tech ecosystem organizers. But those personal philosophies can vary person to person. In the stressful pandemic era, our capacity for empathy shrunk. In June 2021, following demands from employees and other stakeholders for personal politics and work to merge, Techniical.ly published a story headlined, “Tech CEOs have nowhere to hide anymore.”

In recent years, innovation and entrepreneurship organizing seemed to return to a degree of bipartisanship. The bipartisan-backed EDA Tech Hubs program invested $500 million into a dozen different advanced research projects spread across both majority Republican and Democratic states. 

“In states like Ohio or Alabama, you’re likely to work alongside people who have vastly different political views,” Brackeen said of his more progressive-leaning founders and startup organizers. “You’ll get nothing done if you can’t find common ground.”

Often goals can be merged with coalition building. Once framed as a moral imperative, many inclusive entrepreneurship programs are now pitched as strategies to boost economies. As a Techncial.ly special report last year put it: fewer inventors, entrepreneurs and technologists leaves us all worse off.

Brackeen shared that he’s successfully worked with Republican state officials by tweaking his language. 

“If you make your work about jobs and growth, you’ll have support,” Brackeen said. “But if it’s framed solely around identity, it becomes much harder.”

Entrepreneurship as a unifying strategy

As a Biden administration challenged the personal philosophies of many Republican voters, another Trump administration may do the same for his political opponents. Economic growth, though, shares bipartisan support.

“Communities want to keep tax dollars in-state,” said Alabama’s Underwood, “see their young people stay, and find ways to make their region stronger.”

Brackeen is an outspoken Trump critic, but has and will work across the aisle.

“People with different views can still come together around creating a better community,” Brackeen said. “Entrepreneurship at its core is about improving lives, creating jobs and driving local economies.”