The US government shutdown , which began on Tuesday, October 1, 2025, threatens to disrupt the tech sector, with experts warning of stifled deal flow and halted visa processing for high-skilled workers, according to a report by TechCrunch. This marks the first government shutdown in seven years, with no clear end in sight due to the unpredictability of the Donald Trump administration and a deeply divided Congress.
The report notes that four of the eight government shutdowns since 1990 have occurred during Trump administrations, with the most recent in 2018 lasting a record 35 days. Experts fear that a prolonged shutdown could exacerbate challenges for startups and the broader tech industry. The shutdown has already frozen operations at the Department of Labor, which handles initial approvals for H-1B visas and green cards, effectively stalling the immigration pipeline critical for startups. Immigration attorney Sophie Alcon told the publication, “This creates significant uncertainty for a startup’s workforce, including founders who may be on visas themselves.”
The visa process, already strained by President Trump’s recent announcement of a $100,000 H-1B visa application fee, faces further complications. Michael Scarpati, CEO and founder of fintech startup RetireUS, highlighted the impact on visa-dependent workers, stating to TechCrunch, “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.”
Investors, founders, and lawyers interviewed in the report expressed concerns about delayed deal flow, as the shutdown could hinder startups’ ability to secure funding and maintain operations. If the shutdown extends beyond a week, the ripple effects could significantly hamper the tech sector’s growth, experts warned.
The report notes that four of the eight government shutdowns since 1990 have occurred during Trump administrations, with the most recent in 2018 lasting a record 35 days. Experts fear that a prolonged shutdown could exacerbate challenges for startups and the broader tech industry. The shutdown has already frozen operations at the Department of Labor, which handles initial approvals for H-1B visas and green cards, effectively stalling the immigration pipeline critical for startups. Immigration attorney Sophie Alcon told the publication, “This creates significant uncertainty for a startup’s workforce, including founders who may be on visas themselves.”
The visa process, already strained by President Trump’s recent announcement of a $100,000 H-1B visa application fee, faces further complications. Michael Scarpati, CEO and founder of fintech startup RetireUS, highlighted the impact on visa-dependent workers, stating to TechCrunch, “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.”
Investors, founders, and lawyers interviewed in the report expressed concerns about delayed deal flow, as the shutdown could hinder startups’ ability to secure funding and maintain operations. If the shutdown extends beyond a week, the ripple effects could significantly hamper the tech sector’s growth, experts warned.
You may also like
Health Alert: This habit is prematurely aging the brain, and elderly-like diseases are occurring at a young age..
Women's World Cup: Hopefully we can keep Wolvaardt quiet, says Knight
Whooping cough can be fatal in children under age 2: Study
Global economy seeing structural transformation, India's capacity to absorb shocks strong: FM
Photo Gallery: Priyanka Chopra's killer look in a stylish white dress, see here...
