UNSPOKEN: Trump’s Tariffs, Global Chaos & What It Could Mean for Aussie Founders
- Warwick Donaldson
- Apr 9
- 7 min read
On Wednesday 2nd April 2025, U.S. President Donald Trump declared it “Liberation Day” as he announced sweeping tariffs on nearly every country in the world, upending the U.S.-led global push for free trade.
The effects on global markets have been substantial, with some indices experiencing drops comparable to those seen during the onset of the COVID-19 pandemic five years ago. Notably, the S&P 500 fell over 4% immediately after the tariff announcement, reflecting widespread investor unease.
This is one of those moments when global forces start hitting the startup trenches. Trump is back in the headlines, tariffs are making a return, and founder confidence is starting to wobble.
This isn’t about politics. It’s about what this shifting global landscape likely means for Australian startup founders trying to build, raise, and scale in a world where old assumptions are cracking.
Predicting the global economy is difficult at the best of times - and right now, it's harder than ever. Still, it’s worth trying to make sense of where things might be heading.
Let’s decode what could be going on beneath the headlines.
1. The Capital Chain Is Likely Under Pressure
At the top of the stack, LPs - super funds, family offices, and institutional backers - are likely reviewing their venture allocations. Between global volatility, inflation risk, and Trump-era trade posturing, many are probably sitting tight.
Add to that the effective closure of IPO and M&A windows, historically common during heightened market volatility, and you’ve got a liquidity bottleneck that puts downstream pressure on the VC ecosystem. Recent examples include Reddit, which delayed its IPO for over two years before cautiously proceeding in March 2025, and Klarna, which postponed its anticipated U.S. IPO indefinitely due to market instability (this article originally was going to be on the Koala IPO). Meanwhile, several smaller tech firms quietly pulled or shelved listings in Q1 2025 as market sentiment deteriorated:
Local VCs raising new funds? Slower closes, smaller funds - if they close at all.
VCs with dry powder? Potentially more selective, holding reserves.
Emerging fund managers? Facing an uphill battle without a heavyweight anchor.
Founders may start to see longer raise cycles, more conservative terms, and a higher bar for conviction. Expect to encounter more zombie funds - VC firms that are still “active” but aren’t actually investing - and investors still attending demo days but not writing cheques..
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2. Software vs DeepTech: Different Exposure
If you’re a software founder, your main risks will likely revolve around:
Tighter access to capital
Slower sales in the U.S. if business confidence dips or recession hits
Valuation benchmarks tracking downward with public SaaS comps, particularly in sectors like martech and fintech where companies such as HubSpot and Block have experienced significant valuation compression since early March, many of which have seen valuation compressions of 20-40% since tariff announcements.
But DeepTech founders are facing more layers of exposure:
Rising hardware and component costs, with computer parts and electronics facing estimated price hikes of 30% under the new tariffs.
Manufacturing delays due to supply chain shifts and tariffs, particularly acute for companies reliant on Chinese or Vietnamese production, which face tariffs up to 104% and 46%, respectively.
Weakened U.S. demand in capital-heavy sectors
Hard choices around nearshoring or onshore production
The more physical, regulated, or globally integrated your business is, the more you’ll need to proactively mitigate risk.
3. The U.S. Is Becoming Less Predictable
The U.S. has long been a stable anchor for capital and growth. But recent volatility - abrupt trade policy swings, election-year chaos, and signs of inward-looking leadership - suggest a new world order may be emerging.
We’re likely entering an era where: recent tariff announcements have already impacted more than US$1.7 trillion in global trade volume, and retaliatory measures from China and other nations are further straining traditional alliances.
We’re likely entering an era where:
Regional powers gain influence
Multilateral trade agreements splinter
Market access becomes more politicised
This shift could alter how U.S. investors behave, how corporates buy, and how Aussie founders expand. A U.S. go-to-market might still make sense - but it needs a built-in contingency plan.
The real founder dilemma? Act now during peak uncertainty or wait it out with everyone else? Imagine you're about to launch in the U.S. market. Do you double down on your GTM plans despite tariff-driven cost hikes and cautious buyers, or do you delay by six months and risk missing the window when capital and demand rebound? Neither option is risk-free – but not choosing is a decision too.
4. A U.S. Recession Could Hit Demand
If the U.S. tips into recession - a view that’s increasingly mainstream, with Goldman Sachs now forecasting a 45% recession probability - founders should prepare for:
Consumer pullback in eCommerce, marketplaces, health and wellness
Longer sales cycles for B2B SaaS
Procurement delays and budget freezes across the enterprise landscape
If your revenue relies on U.S. demand, now’s the time to re-run forecasts, stress-test assumptions, and tighten go-to-market planning. U.S. consumer confidence has already dropped 6% in recent weeks, according to University of Michigan data. Meanwhile, U.S. small-business confidence has also taken a hit: the NFIB Small Business Optimism Index fell 3.3 points to 97.4 in March, the biggest drop since mid-2022, with business owners citing increased uncertainty and lowered expectations for future sales. Additionally, the share of small businesses planning to raise prices in the next three months climbed to 30%, its highest in a year, suggesting more pressure on costs and margins. The share of owners expecting better business conditions fell 16 points to 21% the sharpest drop since 2020. As Fed Chair Jerome Powell recently warned, tariffs may bring both inflation and slower growth, compounding the pressure founders will face selling into the U.S. market.
At home in Australia, consumer sentiment is also wobbling. According to Westpac and the Melbourne Institute, the Consumer Sentiment Index fell 6% to 90.1 in April, down from 95.9 in March. Analysts attribute the drop largely to uncertainty and concern triggered by the new U.S. tariffs and their downstream economic impact.
5. But Opportunity Is Still There
Despite the chaos, opportunity remains - especially for founders who adapt quickly:
A weaker AUD makes Aussie startups more attractive to USD-based investors. With the exchange rate hovering around USD $0.62, U.S. investors effectively get more equity for every dollar invested compared to previous years. This currency discount can make Australian startups particularly appealing, especially when valuations are already being compressed globally. Currently, the AUD sits at around US$0.62, making investments in Australian companies notably cheaper for foreign investors.
Talent is cheaper and more available as global layoffs continue
Diversifying market access can reduce reliance on U.S. buyers
Resilience becomes a differentiator - founders who can navigate uncertainty will stand out
This is the moment to lead with calm, clarity, and a strategy tailored to volatility.
6. New Things to Prepare for Your Raise
Founders should anticipate slower timelines, sharper investor questions, and deeper diligence. Expect questions like:
How is your go-to-market strategy adapting to macro pressure?
What exposure do you have to U.S. tariffs or supply chain constraints?
What’s your contingency plan if a key market slows or disappears?
How efficiently can you use capital in a more conservative funding climate?
Are you managing FX exposure wisely, especially if your revenue or costs are USD-linked?
Have tight answers. Bake it into your pitch deck. And most importantly - structure your data room like someone’s actually going to open it.
Need Help Navigating Your Capital Raise?
Check out some of my most-read articles that break down the capital raising process for Aussie founders.
📚 Raising Capital 101
🧠 Understanding Investor Mindsets
⚠️ Avoiding Common Pitfalls
📈 Advanced Capital Strategies
💡Not sure where to start? Check out the article on The Startup Capital Raising Process it’s a founder favourite.
Final Thought: New Rules, Same Game
The rules are shifting. But the fundamentals of building a venture-scale business haven’t changed.
So ask yourself:
Are we too reliant on unstable jurisdictions?
Are there new opportunities that are worth pursuing?
Are we prepared for further volatility?
How exposed is our investor base?
You don’t need to predict the future - just prove you’re equipped to operate in it.
Your Thoughts?
This is Unspoken - where we unpack the real forces shaping your journey as a founder. Not just the headlines. The headwinds.
Does this hit for you? Let me know by commenting below, liking the article, replying to this email or hitting me up on LinkedIn.
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Hi - I’m Warwick Donaldson—capital raising expert, and unapologetic advocate for Australian startups. Across my career, I’ve worked on 160+ equity raises totalling over $400m. I pride myself on helping early-stage founders secure funding, avoid costly mistakes, and build investor confidence.
If you’re a founder looking to raise capital, attract top-tier investors, and build a generational business—then hit me up for a chat.
Disclaimer: Excentricity Pty Ltd, trading as CapXcentric (ABN 42 679 978 959, AFS Representative No. 001311296) is a Corporate Authorised Representative of True Oak Investments Pty Ltd (ABN 81 002558 956, AFSL 238184). The information provided in this article is intended for companies and startups and is not directed towards investors. Any statements or representations are general information only and do not take into account your personal objectives, financial situation or needs. Readers are advised to have regard to their own circumstances and consider seeking specific advice from a professional adviser before making any business decisions. No representations are made as to the accuracy, completeness, or reliability of any information provided in this article. Readers use the information provided at their own risk.
