At a time when education policy is in flux and funding priorities are shifting, EdTech companies face new challenges and new opportunities. In our latest webinar, “How to Keep Winning Deals in the K–12 Market,” Novel Capital´s COO and co-founder, Keith Harrington, sat down with Jon Doney, President of Alidade Consulting, to unpack what founders and go-to-market teams need to know to thrive in this evolving environment.
The Big Picture: Why the K–12 Landscape Is Shifting
Jon Doney, a 24-year veteran of the K–12 EdTech sector, opened a clear-eyed view of the current landscape. Following a March 20th executive order to phase out the U.S. Department of Education and return authority to states, education companies are already seeing ripple effects, from procurement delays to increased scrutiny of program content.
While the U.S. Department of Education cannot be dissolved without an act of Congress, about 1,300 positions in the Department have been eliminated, which has affected many key functions. For example, staffing at the National Center for Education Statistics (NCES) and the Institute for Education Sciences (IES) has been almost entirely eliminated, impacting research work and associated grant funding.
The Funding Landscape: 2025 vs. 2026
Approximately 10% of public school district budgets typically comes from federal sources. However, since about 90-95% of district funding from state and local sources is spent on staff salaries, benefits, facilities, and transportation, federal funding is critical for many districts to procure products and services that support students and teachers.
Doney reassured attendees that federal funds under ESSA and IDEA are largely secure through fiscal year 2025 since those programs and funding are codified in federal law. However, fiscal year 2026 is a different story. The President’s budget request to Congress includes a $4.5B cut to K–12 education and proposes the consolidation of various funding programs under ESSA and IDEA into state-directed block grants.
While these proposals don’t indicate that core programs under ESSA and IDEA will be eliminated, they do signal a shift in how money may be allocated and who would control it, if Congress incorporates the proposed changes into federal law. If they do (and they will likely adopt some, if not many, of the recommendations) companies will need to prepare for vastly different funding and procurement processes across all 50 states.
Winning at the State Level: A 4-Part Framework
To help companies succeed despite this volatility, Doney shared a strategic framework for assessing opportunity and engaging with State Education Agencies (SEAs):
- Direct Procurement – Some states buy directly from vendors. Knowing where your solution fits and whether legislative funding support is possible is key.
- Approved Vendor Lists – Get on your target states’ procurement lists early to reduce friction later.
- Brand Awareness with Agencies – Build credibility and positive awareness with state decision-makers and influencers, even without formal endorsement.
- Risk & Market Share Defense – Assess political and policy risk by state. Solutions focused on DEI or SEL, for instance, may face pushback in certain regions.
What EdTech Founders Should Do Now
Here are Jon Doney’s top recommendations for EdTech CEOs navigating this transition:
- Build Evidence of Impact: Whether through ESSA-aligned logic models, third-party validation, or RCTs, demonstrating academic and financial ROI is becoming table stakes.
- Explore Outcome-Based Contracting: Some districts now structure agreements with payment tied to performance outcomes. Be ready to respond to these requests.
- Invest in Government Relations: You need at least one person tracking state policy, funding, and procurement shifts, with more resources if you’re engaging states directly.
- Structure CRM by Buyer Activity: Ensure your sales process reflects buyer actions, not just internal milestones, to improve forecasting and conversion.
Q&A Session
“What kinds of strategy should CEOs of EdTech firms be thinking about to deal with these emerging political dynamics? You had talked about investing in and the concept of evidence of impact.”
EdTech CEOs should invest in tracking and showcasing real, measurable impact. Evidence of student or teacher outcomes builds credibility amid political scrutiny. Align your messaging with district or policy priorities like equity or learning recovery. Proving impact with data turns you from vendor to trusted partner. “If you can show up to a conversation with a district or policymaker and say, ‘Here’s the proof we helped improve student outcomes by X%,’ that puts you in a different category.”
“We’re looking at charter schools as a great target. What is the best way to reach out to charter schools?”
Charter schools value innovative solutions that lead to improved outcomes for students and teachers.
Tap into networks like state charter school associations and participate in their conferences to build trust. Use case studies from charter schools and charter-supporting school districts to show impact and relevance. Keep outreach personal and practical, as these schools move fast and value relationships.
“With the current administration’s push to revive U.S. secondary industries, do you think there will be a shift in the importance of career navigation and certifications, especially for K–12 students who don’t plan to pursue college degrees?”
Yes, there’s a clear shift toward valuing certifications and career pathways outside college.
K–12 systems need tools that guide students toward real-world, skills-based opportunities. Micro-credentials and employer-aligned programs are gaining serious traction. It’s about giving students more options, not just pushing the college route.
Looking Ahead: Stay Proactive, Stay Collaborative
Looking Ahead: Stay Proactive, Stay Collaborative
Despite the uncertainty, one theme rang clear: EdTech leaders are resilient, creative, and mission-driven. As Keith Harrington noted, “It’s amazing how on their toes EdTech CEOs always have to be… and how well they manage it.”
Doney left attendees with this message: “We’ve been through cycles like this before. Keep the conversation going, and work together to adapt.”
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If you’re an EdTech entrepreneur seeking funding solutions, let’s talk. Contact us today to explore how we can support your journey to scaling your impact in the education sector.
