18 Silicon Valley Startups Raised $604M - Week of April 7, 2025. 📉 How Will Silicon Valley be Impacted by Trump Tariff

😔 How Will Silicon Valley be Impacted by Trump Tariff 🎂 Happy 50th Birthday Microsoft 🔮 Seven Tech M&A Predictions for 2025 🐻 UC Berkeley Advised Not to Leave America 🐻 SF Mayor Wants Tech Back

Apr 07, 2025

Happy Monday!

It's been a crazy week around the world... I hope you're hanging in there and finding moments of calm amidst the chaos.

Here are a few great things to read/watch this week:

😔 How Will Silicon Valley be Impacted by The Trump Tariffs — Trump’s proposed "Liberation Day" tariffs risk repeating the devastating economic impact of the Smoot-Hawley Tariff Act of 1930 — a protectionist measure signed by President Hoover on June 17, 1930. That act sharply raised U.S. average tariffs from approximately 40% to nearly 60%, aiming to protect American farmers and manufacturers. Despite warnings from over 1,000 economists urging Hoover to veto, he approved the tariffs. The result was catastrophic: international trade collapsed, unemployment soared, stock markets plummeted, and businesses failed on a massive scale. Many historians and economists view Smoot-Hawley as a significant policy blunder that worsened and prolonged the Great Depression. The critical risk we must confront is whether "Liberation Day" tariffs could trigger a recession—or even a Great Depression 2.0.

Drawing from historical lessons, here's the worst-case scenario for Silicon Valley under Trump's tariffs:

📉 Collapse of International Trade and Exports - Back in 1930s, American imports fell about 66%, from $4.4 billion in 1929 to $1.5 billion in 1933, while U.S. exports fell 61% (from $5.4 billion to $2.1 billion over the same period.) Entire industries that relied on foreign markets (including agriculture and manufacturing) saw their overseas sales dry up. The ripple effect was global: worldwide trade shrank by roughly two-thirds between 1929 and 1934 (a 5-year duration), as country after country raised barriers.

If history does repeat itself, revenue for the public companies and following US focused eCommerce & logistics unicorns will be greatly impacted:

SHEIN - eCommerce
Fanatics - eCommerce
Faire - eCommerce
JUUL Labs - eCommerce
Vuori - eCommerce
Skims - eCommerce
StockX - eCommerce
GOAT - eCommerce
DJI - eCommerce
Flexport - Logistics

📉 Delay in IPOs or M&As — Investor confidence deteriorated significantly in the 1930s as the tariff took effect, accelerating declines on Wall Street. From September 1929 to July 1932, the U.S. stock market lost about 85% of its value. Similarly, the anticipation of "Liberation Day" tariffs has already deepened investor pessimism, causing businesses to see their stock prices tumble in expectation of weakening domestic and international demand. If history repeats itself, there could be no IPOs for the remainder of this year. Companies with significant cash reserves, such as Microsoft, Alphabet, Apple, and IBM, may halt mergers and acquisitions to conserve resources amid falling stock values.

📉 Economic Contraction Will Reduce Enterprise Spending - The U.S. economy severely contracted following Smoot-Hawley, with GDP shrinking 8.5% in 1930, 6.4% in 1931, and 12.9% in 1932. Business failures surged dramatically, and the banking sector was particularly devastated — around 9,000 banks collapsed between 1930 and 1933 due to loan defaults and widespread panic withdrawals. Similarly, a significant economic downturn from "Liberation Day" tariffs could cause enterprise spending to flatten or decrease sharply, adversely impacting revenues across Silicon Valley businesses.

The following unicorns need to watch out:

OpenAI - Enterprise
Databricks - Enterprise
Anthropic - Enterprise
xAI - Enterprise
Canva - Enterprise
Scale AI - Enterprise
Stripe - Fintech
Revolut - Fintech
Chime - Fintech
Plaid - Fintech
Rippling - Fintech
Ramp - Fintech

All in all, we encourage our founders to buckle up, reduce costs, and manage spending cautiously. Even if your business is primarily software-based and not directly involved in international trade, your customers and enterprise buyers will still feel the economic pain and reduce their spending (advertising or software). Revenue impacts will be widespread — there is nowhere to hide.

🎂 Happy 50th Birthday Microsoft — How Microsoft made it through 50 years? Here's Microsoft by the numbers:

1975: Founded by Bill Gates and Paul Allen
$2.7 trillion: Market cap today
1.6 billion: Active Windows devices worldwide
500 million: Xbox monthly active users worldwide
228,000: Employees globally
225: Acquisitions in the last decade
190+: Countries where Microsoft operates

🔮 Seven Tech M&A Predictions for 2025 — The AI boom has set the stage for a wave of tech M&A this year. After 2 consecutive years of decline, tech M&A deals were up in 2024, with some of the largest deals centering on AI. AI companies have also bucked the general downward trend in exit valuations, instead seeing nearly double the median acquisition price from 2023 to 2024. Great M&A Report by CBInsights!

🐻 UC Berkeley International Students Advised Not to Leave America - International students, faculty, and staff at UC Berkeley are being advised not to travel out of the country given recent changes to immigration policy, according to the Berkeley International Office. While students are allowed to stay and study in the U.S., many are unsure if they will be allowed to reenter if they leave. Read more on CBS.

🐻 SF Mayor Lurie to Tech CEOs: ‘How can we get you back?’ San Francisco is working hard to keep startups in the city. Recent initiatives include Permit SF, aimed at cutting the “red tape” that startups face, a new zoning proposal that allows for taller buildings, and offering tax breaks to local businesses. Efforts are supported by organizations like the Partnership for San Francisco, and notable companies such as Waymo have successfully secured permits for mapping operations at SFO. Read more on Techcrunch.

Last week a total of 18 startups raised $603.9M in funding, 0 exits: