The shutdown of the federal government in the United States, which began on October 1, 2025, due to a budget crisis, poses serious challenges for startups and companies planning initial public offerings (IPOs). Analysts emphasize that the current shutdown could significantly complicate the acquisition of government contracts, grants, and regulatory approvals, which are critical for the development of innovative enterprises.
This is reported by Finway
Impact of the Shutdown on the Technology Sector and Startups
The hosts of the Equity podcast — Kirsten Korosec, Maxwell Zeff, and Anthony Ha — note that the current situation creates “greater risk for startups than in the past,” and could also “slow down the active season for public offerings.” Projects in the fields of artificial intelligence, robotics, and space and defense technologies are likely to be the most affected by the government shutdown, as these sectors have recently intensified their collaboration with government entities.
US startups are becoming increasingly dependent on government support — both in terms of funding and obtaining necessary permits to operate in high-tech industries. Delays in the public sector can lead to halted developments, postponed launches of innovative products, and even disrupted market entries for companies.
“This also reflects how the startup landscape has changed over the last decade, especially in recent years. For a long time, the focus was on consumer internet startups. But now we see much more activity in defense technologies and deep tech, where various types of regulatory approvals are needed. Thus, significantly broader sectors of startups today rely on the government in ways that were atypical ten years ago,” said Ha.
IPOs Amid Budget Crisis and Cryptocurrency Market Dynamics
Particular attention is being paid to companies preparing for initial public offerings. Among the cryptocurrency startups planning IPOs are BitGo, Kraken, and Grayscale. Meanwhile, Circle, Gemini, and Bullish have already gone public. However, the shutdown may delay market entry processes for new companies and also impact funding dynamics and valuations in the high-tech sector.
At the same time, TechCrunch noted the growing influence of the Trump administration on tech businesses, which seeks to acquire stakes in leading companies in the industry. This adds another layer of complexity to the relationships between the government and innovative firms.
According to the prediction market Polymarket, most users expected the US government to shut down in 2025 even before the crisis began. 76% of them bet on the likelihood of a shutdown this year, while 64% predicted it would occur before October. The primary reason cited was the Senate’s blockage of financial plans. Meanwhile, the cryptocurrency market’s reaction to the events remained moderate.