Entrepreneurs and investors were apprehensive Wednesday about the effect of Donald Trump’s election on the Boston startup community, with worries that uncertainties over immigration and economic policies could slow the flow of investment and talent that has fueled the fast-growing industry.
Capital markets had effectively priced a Hillary Clinton victory into their investments, mirroring the conventional wisdom that she was poised to win Tuesday. Eric Paley, an investor at Cambridge venture firm Founder Collective, said investors surprised by the outcome could grow more cautious, which could trickle down to funding for even smaller tech companies.
“Uncertainty always makes it harder to take risk. And obviously, startups are a world of greater risk,” said Eric Paley, an investor at Cambridge venture firm Founder Collective. “It’s a hard day to be an entrepreneur in America, in my opinion.”
On the other hand, startups that had positioned their businesses to expect a slowdown in the investment cycle said they should be able to ride out a period of economic volatility.
“For a lot of us, this reinforces work that was done earlier in the year to shore up margins, to ensure sustainable revenue, responsible growth, responsible spending. And if you have done those things over the course of this year, really, you’re agnostic to what happened,” said Nick Rellas, chief executive of Boston alcohol delivery startup Drizly.
Others in the innovation community were concerned with the incoming Trump administration’s immigration policies. Trump made building a wall on the Mexican border a campaign centerpiece, argued for a ban on Muslim immigrants, and has issued conflicting statements about the H-1B visa program that lets tech companies hire skilled workers from overseas.
CRV, a longtime Cambridge venture firm, blasted Trump’s policies and criticisms of immigrants earlier this year in an essay titled “F*ck Trump.”
“Immigrants are an incredible driver of the engine of innovation in this country,” said Jon Auerbach, one of the firm’s partners. “We have Muslim founders in our portfolio, and I can tell you that many of them are concerned about what’s next.”
Tech investors also were wary of Trump’s proposal to raise taxes on the type of investment profits in the private equity and venture capital world called carried interest. That was one area of bipartisan unease: Clinton had also campaigned on higher taxes for such investments. Investors say the lower tax rate allows them to make investments that carry bigger risks.
“I clearly do not agree with that,” said Rudina Seseri, a founder of investment firm Glasswing Ventures. “We’ll see how many of the promises that the president-elect made he’ll keep, from the wall to everything in between.”
Entrepreneurs and venture capitalists — optimists by trade — also said the discontent that drive Trump’s vote should be a catalyst for their industry.
Jo Tango, an investor at Waltham investment firm Kepha Partners, said the election revealed a “desperate” need for change from many voters who are grappling with economic inequality and an uncertain future.
“Many economic policies have not ‘trickled down’ to the bulk of the population. Many people feel uncertain,” Tango wrote in a blog post. “That’s why many voted for a high-risk candidate who vowed to shake up the system. And, other voters are now shaken.”
Matthew George, chief executive of Boston transit startup Bridj, said entrepreneurs should try to solve difficult societal problems to benefit people who feel economically left behind, rather than chasing trendy consumer media or e-commerce bets.
“In order for our industry to survive and thrive, and remain globally competitive, we not only need to start thinking a lot bigger but a lot broader,” said George, a Clinton supporter. “How can we use technology to create success and ladders of economic mobility for everyone, and not just getting a burrito delivered to us five minutes faster?”