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. Out of eight shutdowns since 1990, four have happened during a Trump administration, the last one was for 35 days, the longest in modern history.
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. The result, immigration attorney Sophie Alcon said, is that the pipeline for hiring and renewing visas for high-skilled workers is completely frozen.
“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.”
Thousands of workers in tech are on visas, and have brought with them, in many cases, partners and childr …