How startups could be affected by a prolonged government shutdown | TechCrunch

"The U.S. government shutdown could stifle deal flow, freeze visa processing for workers, and cause other problems for startups and the broader tech sector, especially if it lasts longer than a week, according to experts who spoke to TechCrunch. The U.S. government shutdown, which began Tuesday, is the first one in seven years. The unpredictability of the Trump administration coupled with a politically entrenched Congress makes it hard to predict when the shutdown will end."

"TechCrunch spoke to investors, founders, and even lawyers who warned about delayed deal flow and visa processing for workers, which was recently upended by a recent change by President Trump who announced the application fee for an H-1B visa would increase to $100,000 - a number that caused sticker shock within the industry. The main concern is a slowed-down immigration process for startups, since the Department of Labor - which offers first approval for H-1B visas and green cards - is shut down."

""This creates significant uncertainty for a startup's workforce, including founders who may be on visas themselves," she told TechCrunch. "Visa workers are hit hard in a shutdown because their status depends on government approvals," Michael Scarpati, CEO and founder of the fintech RetireUS, added. "When processes like E-verify or labor certifications stop, workers risk falling out of status, leaving their future in the U.S. uncertain and creating added disruption for the businesses that depend on them.""

The shutdown threatens startup and tech sector operations by halting key government services and slowing investment activity. Immigration approvals are largely paused because the Department of Labor is closed, which freezes initial H-1B and green card approvals and renewals. A recent proposed H-1B fee increase has amplified industry uncertainty. Visa-dependent founders and employees face risks when E-Verify and labor certification processes stop, potentially causing loss of legal status and family disruption. Prolonged closures can delay deals, impair hiring, and create sustained operational instability for companies relying on high-skilled international talent.

Read at TechCrunch