Are you ready for the thundering herd?

The influence in the new Trump White House of some of America’s most prominent venture capitalists and tech entrepreneurs led by Elon Musk, is likely to enhance conditions for venture investors

DONALD TRUMP’S SECOND TERM as US president looks likely to offer fascinating new opportunities for venture investors – especially venture investors in Israel and the Middle East.

Trump’s re-election to the presidency has already sent US stocks soaring to record highs. Analysts at Goldman Sachs believe his policies are likely to breathe new life into the US IPO and M&A markets, creating new exit opportunities for investors.

Israeli stocks also jumped on news of his victory, spurred by expectations that a Trump administration is likely to apply more effective pressure on Israel and Iran to end the escalating year-long crisis triggered by Hamas’ murderous assault on October 7th 2023, while Trump will also seek to cement the Abraham Accords with the normalization of relations between Israel and Saudi Arabia.

Israel’s economy, which has demonstrated remarkable resilience despite the war and constant rocket barrages from Hamas, Hezbollah, Houthi rebels, pro-Iranian groups in Iraq and the Iranians themselves, can be expected to surge once the war is over.

Meanwhile, the influence in the new Trump White House of some of America’s most prominent venture capitalists and tech entrepreneurs led by Elon Musk, is likely to enhance conditions for venture investors. Donald Trump Jr’s decision to skip White House duties and become a partner at 1789 Capital will put venture investing at the heart of the Trump family dynamic.

An end to election season uncertainty, combined with President Trump’s plans for tax cuts, deregulation and his promise to rebuild traditional US manufacturing and mining industries, are driving enthusiasm around the US economy. While his plans for tariffs and other sanctions against China and other competitors raise some doubts, the general optimism in the American business sector is infectious.

The historic Abraham Accords were Trump’s major foreign policy achievement during his first term, but the prospects for a broader Middle East peace were shattered when Hamas launched its attack on October 7, 2023, dragging Israel into what quickly became a multi-front war waged by a coalition of Iranian-backed armed groups. Iran, emboldened by the lifting of sanctions previously imposed by Trump, carried out its first direct attacks against Israel and spurred its Houthi allies in Yemen to attack international shipping in the Red Sea. This piracy slashed traffic through the Suez Canal by nearly 70 percent, driving up freight costs, increasing delivery times and wreaking havoc in global supply chains.

While Trump has expressed strong support for Israel’s war against Hamas in Gaza and spoken to Israeli Prime Minister Benjamin Netanyahu at least three times since winning the election, he has reportedly told Netanyahu that he wants the war ended by the time he takes the oath of office in January. In a blunt warning to Iran’s allies, including Hamas, anyone holding American hostages will “pay a very big price” if they are not released before he assumes office, Trump told the Republican National Convention in July.

President Biden maintained arms supplies to Israel, helped defend it against two Iranian missile barrages, sent aircraft carrier battle groups to the region and ordered US fighters to carry out several bombing campaigns against Houthi targets in Yemen. But Iran is more likely to fear much greater and more direct retribution from an unpredictable Trump administration eager to secure a quick end to the war in Gaza and Lebanon.

Evaded Biden

The likely defanging of Iran – either through military action, reimposed sanctions, or the threat of both – will speed up a settlement of the year-long conflict that evaded Biden and his team.

Israel’s economy has withstood the pressure of the past 13 months with breathtaking resilience. There has certainly been hardship – a soaring deficit, severe damage to tourism, construction, agriculture and other businesses forced to relocate away from rocket attacks – but the Tel Aviv stock market has risen more than 22 percent since the start of the year, average wages have risen, unemployment is at 2.7 percent and inflation is around 3.5 percent.

Despite the war, and a tough global market, venture investment in Israel has increased 32 precent year on year – a growth rate that leads the world, ahead of trends in the US, Europe and Asia. If Israel can achieve these phenomenal results after a year of war, just imagine how its economy will come roaring back if Trump can help create the conditions for peace and spur the necessary rebuilding of infrastructure and other major projects alongside the country’s world-class tech sector.

The attack by Hamas on October 7th is widely believed to have been aimed at sabotaging the Abraham Accords. A return to peace will enable Trump to move forward with his dream of normalizing relations between Israel and Saudi Arabia – an achievement that could be his greatest foreign policy legacy.

Normalization

Israel-Saudi normalization will unleash a vast wave of joint technology and infrastructure projects, triggering an investment bonanza. Major regional initiatives in water, food, transportation, clean energy and cybersecurity, fueled by joint Israeli-Gulf technology startups and partnering with global industrial companies, will attract billions of dollars of inward investment and shape the largest new venture market in decades.

Trump’s first presidency was favorable toward tech investment. The total annual value of US venture deals jumped from $85.2 billion in 2016 to $173.3 billion in 2020. His second term promises to eclipse those numbers. Elon Musk, Marc Andreessen, Vice President-elect JD Vance, Peter Thiel, Palmer Luckey, Joe Lonsdale and other VC leaders will all have a direct impact on Trump’s economic policy. There has never been such a prominent group of venture capitalists so active in Washington. Valuations of cryptocurrencies and Tesla – both obvious favorites of Musk – have surged alongside banks and other business giants, leading to expectations of increased earnings for companies and those who invest in them.?

Biden’s CHIPS and Science Act authorized $280 billion in new funding to boost domestic research and manufacturing of US semiconductors, but these venture bros will create a VC-friendly, AI-aware, crypto-enthused focus on digital assets and tech innovation. It will be boom time for startups and venture investors.

So I think the coming months and years will herald a new renaissance of venture investing, a golden age for technology innovation, significant growth in M&A and IPO opportunities, and an inflection point for Israel’s economy based on securing peace and a new era in Middle East regional relations.

I’m eagerly anticipating this historic journey. I welcome your suggestions of what we should do together.

About ‘Investors on the Frontlines’

I’m the CEO and Founder of?OurCrowd, the global equity investment platform that gives individual accredited investors access to pre-IPO startup deals alongside top-tier VCs. If you are an investor, private family office or financial advisor, subscribe?here?for my biweekly commentary or follow me on?Twitter. I welcome your comments in the response section below.