Experts Comment: What Does Trump-Era Deregulation Mean For Startups?

Deregulation has always been a buzzword in the so-called lexicon of Donald J. Trump, having become a major focus during his first presidential term. And, with Trump being particularly well known for his candor, he hasn’t held back when it comes to expressing his dissatisfaction with the status quo.

Indeed, both the president-elect and his constituents frame regulation as an infringement on the basic rights and freedoms of private enterprise and individuals. Donald McGahn, Trump’s White House Council during his first presidential term, echoed this sentiment, stating that “the ever-growing, unaccountable administrative state is a direct threat to individual liberty.”

Thus, the former president’s 2024 election campaign continued this trend, pushing the ideals further than ever before and making plenty of claims about the potential benefits of scaling back on government regulation. This includes assertions that regulation is unnecessarily expensive and that cutting regulations leads to job creation. Of course, these claims are controversial and highly contested.

However, deregulation, as a political and economic strategy, isn’t an intrinsically zero-sum game – it doesn’t need to be an all-or-nothing approaching to managing a country. It’s possible to loosen regulations in some contexts and industries while leaving them as they are (or even making them stricter) in others. And, neither increased regulation nor deregulation are intrinsically bad.

Thus, the deregulation topic is enormously complex, and there’s a bit of a difference between the typical definition and understanding of regulation as opposed to what deregulation means under the Trump administration.

Deregulation Vs. Deregulation In the Trump Era?

Part of the argument for deregulation is that current over-regulation is not only restricting people’s personal freedoms, but it’s also introducing unnecessary bureaucratic obstacles to industry, making it nearly impossible for businesses to get anything done practically speaking.

Confined by red tape and an endless list of permits, applications, permissions and more, the argument is that over-regulation is preventing businesses from being to operate effectively and efficiently – and in some cases, it’s preventing them from being able to operate at all.

However, simply removing any and all regulations isn’t a viable solution either – some level of management and oversight is necessary and important to maintain a some control and implement protections for potentially vulnerable businesses, individuals and society more generally.

A good example of the complexity of this balance is sustainability and environmental regulation. Regulation is important for the purpose of maintaining some semblance of control over the effects that large corporations and industries have on the environment as the ramifications thereof will seriously affect not only the whole country, but the world too.

But, that doesn’t mean that simply implementing and enforcing any and all major regulations and restrictions on industries and anything to do with the environment and sustainability is a  good idea either.

Indeed, over-regulation can make it incredibly difficult for anybody to get anything done at all, potentially hampering positive environmental efforts too. It also has the potential to reduce incentives for businesses to take part in green initiatives which can have an overall net negative effect socially, economically and environmentally too.

Thus, there’s a fine line between too little regulation and too much regulation. Of course, the incentives beind imposing regulations and upholding them is another really important consideration too – hence, the mixed response to Trump’s announcement of the new Department of Government Efficiency (DOGE) under Elon Musk.

What Is DOGE?

The Department of Government Efficiency (DOGE) is a US presidential advisory commission that was  announced by President-elect Donald Trump for his upcoming second term. Led by Elon Musk and Vivek Ramaswamy, the aim of DOGE is to restructure federal agencies, reduce wasteful spending and eliminate unnecessary regulations in  order to enhance government efficiency.

Although it’s not an official federal executive department, DOGE is expected to influence significant policy changes, particularly in deregulation efforts.

The intention is supposedly for the commission’s work to be concluded by midway through 2026, aligning with the United States’ Semiquincentennial, the nation’s 250th anniversary of the signing of the Declaration of Independence.

So far, Musk has indicated targets such as the Consumer Financial Protection Bureau and the Department of Education for potential elimination or restructuring, for instance, making the new department immediately controversial.

While many people don’t like the idea of deregulation and the potential influence that DOGE may have on the US economy, others are in support of the initiative, asserting that the country does need to cut back a bit in certain areas, both in terms of intervention and financial contributions too.

However, the conversation has been made significantly more complicated by the appointment of Musk, the richest man in the world. The concern held by many on both sides of the argument is that the American billionaire has too much personal investment in the conversation – literally.

With that much skin in the game, is he really able to put his own agenda aside and make decisions that are best for the country as a whole?

How Will Deregulation Under Trump Affect Startups? 

The question of how deregulation is going to affect the US economy and startups specifically is one that’s difficult to provide a clear answer to based on the fact that there are simply so many variables at play and the situation is incredibly nuanced. It depends on the industry in question and it depends on the level of regulation that ends up being decided upon – whether it’s complete deregulation or just a loosening of the shackles.

There’s no doubt that some people and businesses will be positively impacted while others may struggle, but what will the broader, long-term effect be on the US, the American economy and the world more generally?

We spoke to a handful of experts to gain their insights into the topic and find out what they think Trump-era deregulation has in store for us.

Our Experts

• Sean Kane: Chair and Co-Founder of F6S
• Ali Kazmi: Co-Founder of  AI Simulator
• Richard Robinson: CEO at Robin AI
• Oliver Gassmann: Professor of Technology Management at The University of St. Gallen

Sean Kane: Chair and Co-Founder of F6S

“Trump’s promises of deregulation are already reshaping the US startup scene. Startups and their founders thrive on opportunities and we’re seeing that founders are hopeful, with small business optimism soaring to a six-year high right after the election. Hundreds of thousands of US founders in our F6S community are hopeful that their growth will be fueled by lower regulatory barriers and more capital.

Venture funding is already in an AI-fueled recovery with funding up 53% in the last quarter of 2024, but startups are optimistic that a Trump economy will unlock more investor interest in AI and deregulation growth plays. There is some concern in specific sectors that import skilled labour, such as renewables, and among those who disagree with Trump’s social policies. However, the startup sector overall is expecting a presidential term with a strong growth tailwind.”

Ali Kazmi: Co-Founder of  AI Simulator

“I think Trump’s presidency might lead to a swathe of innovation for startups, with more opportunities to expand and explore ideas we haven’t before. A lot of the hurdles that innovation faces are down to delays in approval processes for regulations – particularly with developing technologies in MedTech, FinTech, HealthTech and AI. This de-regulation, with a focus on innovation,  will hopefully also bring more opportunities for international collaborations, which will be beneficial for UK startups looking to expand outside of Europe.

We could see a thriving US economy, as implied by the dollar strengthening post-Trump’s electoral win, meaning startups with strong business models will still be able to secure US VC funding, with the possibility of more investment opportunities opening up as the economy grows. These increased funding opportunities could result in growth for startups that lead the future of innovation, pushing tech forward faster than ever before.”

Richard Robinson, CEO at Robin AI 

“The biggest opportunities for business innovation and new start-ups are areas of regulation and deregulation. Innovation research has shown that in these phases the balance of the market forces is changed. So, any kind of disruption – like expected from the Trump regulation – leads to entrepreneurial activities.

With increased regulation on ESG, a whole new industry focused on the implementation strategies of these new requirements arose. Certainly, a lot of new start-ups will arise around gaming, betting, and entertainment. But I also expect new platform companies in areas previously deemed as data sensitive.

This increase of new platforms does not automatically ensure that welfare overall increases, because at the same time existing companies will have to adapt and could win or lose.”