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How Does Shifting Tariff Policy Affect Venture Capital and Startups?
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By Brian Gormley, WSJ Pro
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Good day. The White House’s whipsawing tariff policy has sown uncertainty in markets. What impact do tariffs, and the shifting policy on them, have for startups and venture capital? Please email responses to vcnews@wsj.com.
Last week, we asked where you see agentic AI making the most impact in the near term, and if you have any concerns about the responsible use of the technology. Here are some of the responses, edited for length and clarity.
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Steve Jang, founder and managing partner of Kindred Ventures: “In the enterprise, agentic AI will transform various data-intensive and time-consuming functions like customer service, research, document generation and compliance. In design and developer tools, it will act as a copilot tool to accelerate productivity for human knowledge workers, and support more autonomous workers that operate with minimal instruction and oversight on software processes or chains of virtual tasks. Increased risks appear if you use untested agents in critical areas of a company or in regulated functions that require a high degree of accuracy, safety and trust. This is particularly true for industries like self-driving cars, healthcare, logistics, financial markets, energy and defense.”
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Scott Beechuk, partner Norwest Venture Partners: “Agentic AI is poised to make a significant impact in areas like customer service, sales process acceleration, accounting, supplier negotiations and legal casework in the near term by automating business processes, enhancing personalization and optimizing logistics. With the emergence of professional-grade deep research agents, we’re moving closer to overcoming enterprise hurdles like reliability and security, paving the way for widespread adoption. However, it's still vital to ensure these tools are deployed responsibly, addressing privacy and bias concerns.”
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Aytekin Tank, founder and chief executive of Jotform: “In the near term, I see the biggest impact of agentic AI in small businesses and bootstrapped startups. Those who effectively leverage AI agents will be able to scale exponentially faster by automating routine tasks like customer service, data processing and content creation. AI agents are narrowing the gap between larger enterprises with the funds to hire as needed, and smaller companies looking to compete. As artificial intelligence advances, the responsibility to use it ethically grows in tandem. The risk lies in over-delegating tasks to AI without instilling corresponding human values. Ensuring agents operate with ethics, empathy and fairness should be a priority.”
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And now on to the news...
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Mark Uyeda, acting chair of the SEC, wants to let more individual investors put money in private markets. PHOTO: SEAN SMITH FOR WSJ
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Private equity might open up. The new leadership in Washington has declared plans to fulfill a longtime policy goal for private-equity managers: expanding the pool of ordinary people who can invest in the asset class, WSJ Pro's Chris Cumming reports.
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In a speech last week, the acting chair of the Securities and Exchange Commission, Mark Uyeda, announced a firm break with Biden administration policy and said he was seeking ways to open private markets to so-called retail investors.
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These are the broad mass of Americans who don’t meet the wealth thresholds to invest in private equity, venture capital or hedge funds. Such vehicles are generally restricted under securities law to institutions such as pension funds and endowments, or accredited investors who meet wealth and income cutoffs.
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-10%
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The Nasdaq Composite sank 2.6% and entered correction territory, marking a decline of 10% or more from a recent peak.
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How the Biggest Crypto Hack Ever Nearly Destroyed Major Exchange
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The crypto industry came face to face with its biggest adversary last month, and it wasn’t onerous regulation, hyped coin launches or even Sam Bankman-Fried, The Wall Street Journal reports.
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On Feb. 21, a ring of North Korean hackers pulled off the largest crypto heist ever, imperiling Bybit, the world’s second-largest crypto exchange. By late evening Singapore time, a group called Lazarus had absconded with $1.5 billion. Bybit is based in Dubai and operates out of Singapore. U.S. customers aren’t permitted to trade on the platform.
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At a time when the Trump administration is promoting cryptocurrency as a critical U.S. industry, North Korea’s hacking army has emerged as enemy No. 1. Since 2016, North Korea has stolen more than $6 billion in cryptocurrency, according to Chainalysis, a blockchain-analytics company.
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GOP Bill Aims to End ‘Debanking’ of Crypto Companies
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The leader of the Senate Banking Committee wants regulators to stop worrying about customers causing reputational damage to banks, WSJ reports.
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Sen. Tim Scott of South Carolina says that concern is fueling “debanking,” where banks allegedly avoid certain businesses. That issue has gained attention thanks to the advocacy of crypto companies and recent remarks by President Trump, who called out Bank of America and JPMorgan Chase for closing conservatives’ bank accounts.
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Scott introduced a bill on Thursday that would end regulatory oversight of so-called reputational risks, calling the bill a first step toward ending discrimination against clients. Eleven other Republican senators are co-sponsoring the bill.
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Funds
Cleveland-based JumpStart Ventures held the first $25 million close of its NEXT Fund III, which has a $50 million target, and will invest in seed and Series A startups.
People
Cybersecurity- and AI-focused investor Evolution Equity Partners said John Cordo joined the firm. He most recently specialized in cybersecurity investing at Brighton Park Capital.
Agtech startup Enko Chem appointed Anthony Klemm as chief executive officer. He was most recently vice president of global business development and licensing at Corteva Agriscience.
Nutrition brand Supergut closed a minority growth investment and added Tracey Warner Halama as chief executive officer. She was previously president and CEO of Vital Proteins.
Sonar, a code quality and security provider, appointed Jean Compeau as chief financial officer, and Eyal Ben David as chief legal officer and general counsel. Compeau was previously deputy CFO at Palo Alto Networks. Ben David was general counsel at JFrog.
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Aescape, a New York-based autonomous robotic massage provider, secured an $83 million strategic round led by Valor Equity Partners.
PetScreening, a Mooresville, N.C.-based pet policy management software provider for the rental housing industry, landed $80 million in Series B funding led by Volition Capital and Guidepost Growth Equity.
SpecterOps, an Alexandria, Va.-based cybersecurity startup, collected $75 million in Series B funding led by Insight Partners.
Zeitview, a Los Angeles-based company using AI technology in its systems that visually inspect critical infrastructure, picked up a $60 million investment. Climate Investment led the funding, with Investment Director Mike Bishop joining the board.
Grain, a Tel Aviv-based provider of an AI-driven foreign exchange optimization platform, closed a $33 million Series A round led by Bain Capital Ventures.
Spiritus, a Los Alamos, N.M.-based carbon removal startup, grabbed $30 million in Series A funding led by Aramco Ventures.
Crogl, an Albuquerque, N.M.-based cybersecurity risk management startup, launched with $30 million in funding, including a $25 million Series A round led by Menlo Ventures. Menlo’s Tim Tully will join the board.
Flex, a New York-based back office automation provider, raised $225 million in equity and debt funding. Titanium Ventures led the $25 million equity portion, with General Partner Yash Patel joining the board.
Auxia, a Palo Alto, Calif.-based agentic customer journey orchestration platform, scored $23.5 million in seed and Series A funding from investors including VMG.
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Here is our weekly roundup of stories from across WSJ Pro that we think you’ll find useful.
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There’s a new buzzword in sustainability circles when it comes to investing in renewables and clean technologies: resilience.
AI, of all things, may help video calls feel more human.
Big tech platforms are moving toward more automation in ad sales, despite a litany of complaints from marketers.
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Sen. Elizabeth Warren (D., Mass.) at a rally outside the Consumer Financial Protection Bureau last month. PHOTO: CRAIG HUDSON/REUTERS
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Should we be moving data centers to space? (MIT Technology Review)
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Athena makes it to the moon, but uncertainties remain (Scientific American)
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