Startups and the U.S. government: It's getting complicated | TechCrunch

"A growing share of startups have the U.S. government as customers, or are aiming for permits and defense-related contracts. When the government is operational, that connection can provide a needed boost and revenue to startups. But when the government ceases to function, as it did starting October 1, those close ties can stifle or even halt progress for startups."

"This week on Equity, Anthony Ha, Max Zeff, and I (Kirsten Korosec) talk about how a prolonged U.S. government shutdown poses more risk for startups than in the past - not to mention put a damper on an active IPO season. The three of us dug into a few other topics too, including the how AI companies are trying to monetize and the U.S. government's latest push to take ownership stakes in the tech and industrial sectors."

Startups have forged stronger ties with the U.S. government as customers, regulators, and funding partners, driven by defense-oriented demand for AI, automation, space, robotics, and climate technologies. Government relationships can deliver revenue, regulatory approvals, and capital that help startups scale. Government shutdowns and interruptions now pose greater operational and financial risk, potentially stalling projects and damping IPO activity. At the same time, federal intervention has expanded beyond contracting to include renegotiated loans and equity stakes in tech and industrial firms, increasing government influence over corporate strategy and sector investment decisions.

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