What A Biden Presidency Means to Startups & Small Businesses

Posted in News by Ben Worsley

Experts are beginning to weigh in on what the new administration will mean for start-ups and small businesses following the election of Joe Biden as the next President of the United States.

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Historically, a President-Elect who promises to increase business taxes and restore regulatory requirements would probably not find much support within the business community; however, Pitchbook reported that the venture capital industry put 79% of its contributions behind Democratic candidates and causes.

The transition to the new leadership will resonate throughout the economy, but let's take a closer look at a few crucial sectors directly entrepreneurs based on what Biden and VP-elect Harris said during the campaign.

Sustainable Infrastruction & Clean Energy Spending

Biden has a clean-energy plan pushing for an expenditure of $2 trillion in clean energy and sustainable infrastructure. His stated goal of net-zero emissions by 2035 will push for new technologies in renewable energy, electric cars, and construction, which will likely benefit innovative startups. VC funding in sustainable energy has been downtrending during the Trump Administation after peaking in 2012, according to the Brookings Institution.

Source: Brookings Institution

Private equity, in the meantime, has fueled growth in the oil and gas industry, driving the shale and fracking boom with $125 billion in investment since 2008. The transition back to clean energy is expected to be fast and powerful with the combined power of decreasing oil prices and a Democrat in The White House. A recent report from Axios quotes a top fund manager in private equity as noting: 

“Everyone is getting into renewables. It’s just a smarter long-term play, particularly as the macro economics of fossil fuels get worse and the macro economics of renewables get better.” (reporting by Axios)

Immigration via Entrepreneurship

In his four years in office, President Trump decreased legal immigration by almost 50 percent. It remains to be seen how these policies will be modified by the Biden presidency; however, most experts expect a sunnier immigration system for those who seek to move to the U.S. to launch new businesses. Biden's selection of Senator Kamala Harris as his running mate, an immigrant daughter herself, implies that immigration is going to be a significant issue during the next four years. The EB-5 program, which facilitates foreign direct investment in the U.S., particularly in poorer communities, is a program to watch closely. The new president and Congress may look at broadening the program by lowering minimum investment amounts and/or increasing the amount of obtainable visas as the nation recovers from the pandemic-caused recession.

The L-1 visa is yet another program to watch. The application denial rate rose from 18 percent in 2015 to 28 percent in 2020:

Infrographic by Masterplans. Source: USCIS

For over 10 years, Masterplans has been an industry leader in developing business plans that meet the requirements for immigration visas. In each of the last two years, we have been named a top 5 business plan writer by EB-5 Magazine. To learn more about the job creation and economic potential of business immigration through L and E visas and the EB-5 program, click here.

By promoting the H1-B program to allow for an influx of foreign-born talent, the Biden administration could give a big boost to technology startups. The H-1B petition denial rate grew from 6 percent to 30 percent during the Trump administration. In the long term, the program also may assist science and technology through the hiring of university faculty.

COVID-19 Relief & Recovery

To offset the impact of the pandemic on small business, the small business community has been waiting for more stimulus spending. The President-elect's coronavirus relief plan involves providing additional assistance to companies with fewer than 50 employees, especially minority-owned enterprises (MBEs). Whether this is going to come in the form of grants or loans is uncertain, so it's something we're going to continue monitoring. In addition, Biden's plan pledges a $50 billion infusion of venture capital into disadvantaged areas.

Time will tell how small business owners and startups will be affected by the new administration, and much of the implementation of Biden's plans will rely on Congress' support, most likely from across the aisle.


Ben Worsley is Marketing & Creative Director for Masterplans

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