The Big Story: Startup policy priorities for 2026
Today, Engine published the 2026 Startup Policy Playbook and Startup Policy Agenda, highlighting the policy issues coming up this year that will impact startups. There are startups building innovative companies and contributing to U.S. competitiveness in every community across the country, and policymakers’ decisions across a wide range of policy issues will help decide whether and how they can succeed.
Some areas—like AI and content moderation—are already dominating policy conversations, and the startup perspective is often overlooked in crowded and contentious debates. Federally, congressional conversations about AI rules have only just started, but states have either gotten the ball rolling or passed into law legislation on all facets of AI, from foundation models, to consequential decisions, to chatbots, and much more. At the same time, Congress, state legislatures, and regulators are pushing forward with proposals that require that Internet companies verify the ages of all of their users to restrict certain user content or design features for young users. Trade is similarly top of mind for policymakers and startups, as they wait for the Supreme Court to rule on the legality of some of the Trump administration’s sweeping tariffs, which invite foreign countries to create new and heightened trade barriers, making it harder for startups to scale globally. And while most of the immigration policy conversation has focused on the Trump administration’s strategy of indiscriminate arrests and deportations, some facets of the administration’s anti-immigrant approach have directly impacted those looking to build companies and advance innovation in the U.S., including steps to make existing immigration pathways more restrictive and expensive.
Other policy debates may attract less attention, but they still stand to dramatically impact startups. For instance, the U.S. Patent and Trademark Office is preparing to completely overhaul the program that’s been successful at weeding out low-quality patents, which are easily weaponized against startups. Startups are still waiting to see long-promised action from Congress on creating a nationwide privacy framework to reduce duplicate and onerous compliance burdens for startups, as well as action from Congress to reform universal broadband programs to keep them effective and sustainable so that more founders, employees, and users have reliable, affordable Internet access. And policymakers have several options to alleviate the first roadblock many startup founders encounter: limited access to capital. Through changes to capital formation and tax policy, Congress can incentivize more people from more communities to invest in early stage startups. Similarly, startups need Congress to reauthorize the lapsed Small Business Innovation Research and Small Business Technology Transfer programs, which provide critical non-dilutive funding to fund early stage R&D.
Throughout 2026, Engine will work with startups and policymakers across these issues and more to find policy solutions that support entrepreneurship, innovation, and U.S. competitiveness. If you’re interested in learning more about how policy can support startups, please contact policy@engine.is or advocacy@engine.is.
Policy Roundup:
SBIR reauthorization stalls as agencies clarify contingencies. In September 2025, Congress failed to reauthorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs for the first time in the program's history. In recent weeks, Democrats and Republicans have exchanged competing proposals to try and arrive at a compromise. During the lapse participating agencies have all administered guidance to potential SBIR applicants. The National Institutes of Health for example, is only able to support current awards, has removed all solicitations for proposals and, until the program is reauthorized, will not grant new awards. The SBIR program serves as a critical source of non-dilutive capital, especially for startups advancing early-stage R&D. To avoid further damage to a critical innovation pipeline, Congress must move forward with a reauthorization path that makes SBIR/STTR programs permanent.
FTC pushes towards age verification requirements. At a workshop this week held by the Federal Trade Commission, regulators from the agency as well as from state and foreign governments, pushed for Internet and technology companies to deploy age verification technologies to identify when they’re dealing with young users—and change their practices when they identify a user as young. Lawmakers at the state and federal levels have been pushing for sweeping age verification requirements for years, despite legal challenges, inherent risks to the privacy and security of users of all ages, and evidence that requiring all Internet companies to deploy age verification technology would create burdensome compliance costs for startups that likely don’t have young users.
FCC expands unlicensed spectrum in the 6 GHz band. The Federal Communications Commission unanimously voted this week to expand and enhance the use of unlicensed spectrum in the 6 GHz band, increasing high-quality wireless connectivity for innovative technologies developed and used by startups. In a new blog post this week, we examine how increasing unlicensed spectrum ultimately broadens opportunities for startup innovation.
FTC revisits non-compete clauses and worker mobility. The Federal Trade Commission held a workshop this week examining the use of non-compete clauses in employment contracts, following the agency’s 2025 decision to abandon the Biden-era rule banning most non-competes. Republican Commissioner Mark Meador noted the competitive and workforce harms caused by overly broad non-compete agreements, which can limit worker mobility and harm innovation. For startups, access to a mobile, highly skilled workforce is critical, and expansive non-competes can make it harder for young companies to attract the expertise they need.
On the Horizon:
TUE 02/03: The House Education and Workforce subcommittee on health, employment, labor, and pensions will convene a hearing to discuss workforce readiness and the adoption of AI in the workplace at 10:15 AM ET.
Startup Roundup:
#StartupsEverywhere: Hillsboro, Oregon. Instinct is a wildlife-surveying tech company based in Oregon. Founded by Ashwin Datta, the company focuses on conservation natural resource management by providing data on species inhabiting the forests using an automated real-time, edge-computing, satellite-enabled bioacoustic monitoring device. We sat down with Ashwin to discuss his journey, the current challenges with trade, their experience with patents, and broadband accessibility.
