The Startup Visa (update)
I've written about the Startup Visa movement on this blog before so many of you know what it is all about.
For those that don't, it is the idea that anyone who wants to start a business here in the US and can attract a modest amount of investment capital should be granted a visa to stay and work here in this country. It was first proposed by Paul Graham, founder of Y Combinator early last year and it was seconded by Brad Feld, founder of the Foundry Group venture capital firm. Brad is a good friend and a co-investor of mine over the years. Brad roped me into the small group that has been pushing this idea forward. I will say that I haven't done much work on this, mostly cheerleading and making noise about it. But the small group has moved the ball forward pretty far.
Yesterday, Senators John Kerry (D) and Richard Luger (R), the two ranking members of the Senate Foreign Relations Committee formally proposed legislation to create a Startup Visa. A while back Representative Jared Polis (D) proposed very similar legislation in the House. So now we've got legislation with strong sponsorship in both houses of congress.
Brad Feld tells me that about 0.1% of all legislative ideas get this far. So we should be proud of what our small group has done with no lobbyists, no budget, no advisors, and no expertise.
But he also tells me that about 1% of bills that get this far turn into laws. So we've got a lot more to do. We need everyone to contact their Senators and Representatives and explain why this is such an important issue. You can do that now on your own. But I expect that the Startup Visa blog will develop and roll out some tools shortly to make it even easier to do that.
I am certain that anti-immigration forces will find something not to like in this proposed legislation and fight it. But we have to fight back. So many great american corporations, like Intel, Proctor & Gamble, and Google were founded by immigrants. We need more jobs in this country and we can't expect our large corporations to deliver them all by themselves. We need to create new businesses that can employ our citizens. And the history of our country is rich with stories of immigrant entrepreneurs. We have to embrace them, welcome them, fund them, and let them do their thing. A startup visa is one important way to do that.
Looking forward to it!
You think that if this passes, people with a family will be able to get through this process as easily as younger individuals? I.e. is it likely to be based purely on whether you can get seed funding?
Such a good idea, and It’s made an excellent start, it would be great if this got through. Although I can imagine that it would be difficult to keep it air-tight to its purpose (as you pointed out with immigration abuse)… but doesn’t mean it shouldn’t be in effect.
This is a marvelous initiative. It’s a win-win for innovation, jobs, entrepreneurs and investors.The terms are not too onerous and will keep the entrepreneurs focused on creating value and revenue.One quick question though, what happens if the business has an exit event within the first two years. On what basis will the Startup Visa be renewed?
I say once they are here give them a path to citizenship if they want it. We need to keep these great minds.
When most of the US hears “entrepreneur starting a company” they think dry cleaner or bodega not VC, innovation, and technology. Will this encompass those types of companies too?
The criteria is around having qualified investors committing dollars to your venture, not the industry or investment type.
By qualified do we mean “accredited”?I like the concept, but I think there’s going to get a lot of political push back. For this to succeed we need to remove our perspective from this community and see what this looks like to a representative from outside of CA, NY, and MA. To a congress member from North Dakota or Kansas or Mississippi (where essentially no venture capital is ever invested) this is going to look like a jobs bill for coastal elites.
yes, that is true. but this is about welcoming people who will create the companies of the future, not bodegas.
I understand that’s the intent, but that’s not necessarily what the legislation says.I am mostly playing devil’s advocate here but not just for the sake of being argumentative. For this idea to become law it needs to be passed, and it’s not going to be passed be representatives from just the states who have active VC. If you look at who signed the letter 90% of those signatures come from fewer than 5 states. Many (most) of those VC’s don’t invest outside their geographic region. How are we going to convince reps from states that don’t have active VC communities that this will create jobs for their constituants?
it may not create jobs for their regions overnight. but it doesn’t hurt themeither and could help them over time as the economy expands and things likedata centers, back offices, customer service move to lower cost regions
no, it does hurt them — think opportunity cost. also, you’re basically arguing for trickle down economics here, which as you yourself have admitted is a scam.
Actually more importantly, how are we going to create business there…You could do venture funding in Iowa. In fact it could be a great idea…still, it’s not happening so fast
something like this already exists, although not quite the samehttp://www.uscis.gov/portal…
you don’t think bodegas are a part of the future? without google and the dot com bubble, VC investments are a sad story over the past ten years, as you yourself have admitted. from a purely economic standpoint we should be inviting more bodega owners.
I live in one of the most ethnically diverse zip codes in NYC. The small local businesses that proliferate in the area (unlike Manhattan which has become a giant suburban shopping mall) are all independent with very few chain stores and most of the businesses are immigrant owned. The venture capital inevitably comes from within the specific ethnic immigrant community. For many immigrants, coming to the US is about starting a business. This is a wonderful thing about this country. It will be interesting to watch the debate on this bill. Protection of existing businesses like protecting of existing jobs may quickly become the issue.
“unlike Manhattan which has become a giant suburban shopping mall”Manhattanites can still escape their fashionable shops and restaurants, if they like, by taking the subway to parts of the island that are mercifully free of them. So why aren’t more affluent Manhattanites patronizing the rundown bodegas, buffet restaurants, and cheap clothing stores on Dyckman Street uptown, for example? Perhaps because they like their fashionable shops and restaurants?
Touche. There was a time, however, when Manhattan was undeserved, rather than overwhelmed, by suburban chains and the fashionable shops were uniquely Manhattan even neighborhood specific. But the market is efficient at providing consumers with what they want and tastes have homogenized in Manhattan. It is curious with all this increase in choice and drive to segment markets to meet every taste just how bland and undifferentiated the world begins to appear.
only if that business raises at least $250k from ‘qualified investors’
here is what TC says:”The Startup Visa Act of 2010 would create a two year visa for immigrant entrepreneurs who are able to raise a minimum of $250,000, with $100,000 coming from a qualified U.S. angel or venture investor.”here is what i don’t like about this thing:1. i have a bunch of family members who came from india and launched their own small business (my family has done its part to contribute to the stereotype of indian gas station and motel owners 🙂 ). a grand total of ZERO of them would have qualified for this startup visa thing. their gas stations and motels are profitable and employing people.2. of course, the more sinister aspect is that global monetary policy and the US dollar’s role as world reserve currency is a huge part of what enables american finance. so in addition to economic warfare waged against “developing” (my favorite jargon….as if they are just slow….conceals the fact they are being robbed) nations via the world bank, IMF, and economic hitmen, we now have US investors who, as inadvertent beneficiaries of the global monetary system, will buy the talent of the “developing” nations and purchase it on behalf of the US. to me this is a bit too similar to robbery. investors are not to be blamed for this theft, but their willful ignorance regarding it, and their complete and utter refusal to even address it, is not something i find admirable, to put it far more lightly than i should.
don’t make perfect the enemy of goodthat’s why nothing gets done in this country
no, nothing gets done in this country because the people are ignorant. willfully. as i noted before it is easy for you to find this to be a tolerable situation — if i was in your position i would find it tolerable too! 🙂
Seems like capitalism to me. Whether it’s Fred’s interest in this Bill or your families ability to build a business up from scratch, the system works.
Sometimes revolutionary change is needed in response to atrociously wrong policies (ex. civil rights movement). But when it comes to government issues, incremental progress is more often a good thing. It’s difficult to foresee the full consequences of a policy in such a large machine. It’s also difficult to get big demands to pass–this is what makes democracy stable, but excruciating for entrepreneurs that want to see things fixed and done the right way…….Hopefully, we’ll soon be able to implement ways to make government iterate more quickly….
Disagree here kid. The start-up visa is not the same thing as the world bank brutality.The US startup ecosystem, especially for the seed stage, is unique to the US. Those entrepreneurs will not easily find a replacement in their countries, so you are not “stealing” them. You will let them unlock their potential which otherwise just remains unused.Indeed, this will help the US economy on the short term, but in the long term the impact goes back to the global market. And maybe, maybe, this act will force other countries to compete for those people, and than improve their economies.
but why are there are no opportunities for those entrepreneurs in those countries? clearly because of world bank, IMF, economic hitmen, CIA, etc. i understand that the situation is what it is, and we could view this as a way of creating some value out of a bad situation. i would be more sympathetic to this viewpoint if the proponents of this startup visa thing took the time to understand the situation, and why there may not be the same opportunities for entrepreneurs in their native countries, and considered how they might solve that problem rather that contributing to it and exploiting it.also, investing is an internatioanl game now. has been for some time. why not invest in startups in their native country? that might be a way for american finance firms to profit, while also compensating for the theft that has occurred and is occurring. but alas, that is not as convenient.also, while i agree with your point that entrepreneurs may find better opportunities in the USA than elsewhere, i do think that is changing, and the situation is not as clear cut as it once was. there are plenty of huge opportunities in israel, india, south korea, australia, and lots of other places — in fact, depending on your niche, i think it may be better to launch there. and over a longer-term period (say 10 years) i’m more bullish on all the aforementioned relative to the US.
Not sure it’s only world-bank (evil). US was founded by businessmen, by immigrants, it’s a cultural thing. also, seed funding may require more proximity.Although the visa will sure help the US, it will not deplete other countries:1. In countries with strong tech, tech will continue., maybe some entrepreneurs will move other will stay, especially in countries with open culture and large-enough local middle-class market, like Brazil.2. Where there are narrow, if any, startup opportunities, you may actually do a country a service to help emerge some strong entrepreneurs even in the US.3. And for the “developing” countries, they will benefit more if US and western countries will stop subsidizing their own farmers and let everybody compete – free market – with agriculture import/export (but if you think the visa is an issue… try to talk about that!). Having said that, there is no reason in the world not to invest worldwide, open offices in many countries, diversify investments and spot and support skilled entrepreneurs where ever they are
“but why are there are no opportunities for those entrepreneurs in those countries? clearly because of world bank, IMF, economic hitmen, CIA, etc.”Not because of bad government, corruption, poor infrastructure, low-quality labor force, etc.? It’s important to remember that America often attracts the smartest and most ambitious immigrants from different countries; these individuals aren’t always broadly representative of the countries they came from.
why is there bad government? because economic hitmen go in and bribe the leaders to accept world bank/IMF loans, which the countires don’t need and will never be able to pay back. these loans are then granted to american corporations like bechtel to build the infrastructure. because these loans are at ridiculous interest rates, countries end up spending exponentially greater amounts on debt repayment than on development. africa is the most ridiculous example, the continent as a whole spends 4X as much on debt repayment than on healthcare.IMF and world bank loans came from the london and wall st financiers that financed WWII.if there are honorable leaders who won’t be bribed, like jaime roldos or omar torrijos, they are “taken care of” by CIA terrorists/assasins. if teh leaders can escape them, like saddam was able to do, then we have to make a big fuss out of it and go to war formally.the IMF and world bank are in the process of doing the same thing here. the CIA already killed the kennedy brothers and the US cannot pay off its debt. the IMF bailout, coupled with all of its “rewards,” is inching closer to home.
“why is there bad government?”Probably because that’s the default state of much of the world, as is poverty and suffering. A better question is: how many people can we import from a benighted country, before we start importing that country’s poverty and dysfunctions?
as my comments suggest i attribute the primary cause of poverty not to your typical citizen but to the international banking cartel and its subordinates in the intelligence agencies and military industrial complex. so i don’t think immigration and poverty are strongly connected, more like a loose tie.also, i don’t think america needs to be too concerned about importing poverty and dysfunctions. we’re quite capable of creating that on our own, as we are in the process of finding out.
“also, i don’t think america needs to be too concerned about importing poverty and dysfunctions. we’re quite capable of creating that on our own”So why add to them? California has such a large number of immigrants in its prison system, that its governor has proposed paying Mexico to imprison them there.
right, don’t add to them. ultimately a small issue though, poverty will grow and economic opportunity will decline, as is currently happening, so long as global monetary policy is the way it is.
I would add to that imposing on these countries impossible economic policy. First the world bank should impose free global market for agriculture goods, with complete elimination of subsidies to farmers in western world, and only than impose this pure “free markets” terms on the developed countries local markets. Both US and Europe throws billions a day on their cows to “compete” with poor agriculture based economies.
Putting all the blame outside is usually done to avoid own resposibility. Not all countries are the same, but most of the underdeveloped ones have their own share of guilt in their situation.
Few points:1) If you are an immigrant entrepreneur and you do not have your “developing” country, then once you made it in the US it is your duty to help your country by, say, expanding your business to your country and creating jobs there.2) The sense of patriotism is IMHO an atavism in the contemporary global world.3) I doubt the answer is a simple as that “because of world bank, IMF, economic hitmen…”. I come from a country that was once known as “developing” and the “brain drain” from this country to the US was widely discussed. If you wanted to start a hi-tech startup business in USSR 20+ years ago you’d be in jail before you start it. If you try to start it now in Russia or in Belarus, you’d be robbed by the government as soon as you are successful unless you are willing to bribe the right people, and that’s a HUGE improvement from 20 years ago. And that has little to do with IMF, world bank, etc. 4) the US startup scene is so saturated that only the best make it here. There are surely thankful people who stayed in their countries and succeeded because of the reduced competition.
hi greg, thanks for your thoughtful reply. some responses:1. perhaps my comments miscommunicated my views. i don’t believe in nationalism, and have no allegiance to any nation-state.2. you commented on the condition in the USSR and such. corrupt governments are the norm around the world — the USA is no exception either, you will find many legitimate sob stories here as well. however, even with russia, their economy suffers because the US does things like rope them into war (specifically referring to the afghan war in 1979, which zbigniew brezeinski, currenlty an advisor to barack obama, admits was engineered in part to draw russia into a war that would weaken the country militarily and economically).3. your final comment is what i find most unpleasant and what stirs my passion (though i’m sure you’re a decent person, i’m referring only to the comment 🙂 ). it exudes an aura of the all too common american hubris. hubris always requires ignorance.
The salient distinction should be whether the new company will create jobs for Americans, not whether it’s a tech company or not. If a foreign entrepreneur wants to come here, open a dry cleaner, and then only hire his extended family to run it, that’s not what we need with 20% of working age American men out of work, and long term unemployment at a higher level than it was during the early 80s recession.
‘cept you get the taxes…
That is absolutely terrific!Not that I personally wait for startup visa (I have lived in NYC in the ’90s, found the love of my life in Europe, … Sorry, I digress.) We are all people living on one planet, …Before I write too much, let me say that I felt just like doing this:http://www.squidoo.com/fred…(Maybe your readers will add nice comments about you. You certainly deserve it.)
cool. is a lynchpin some sort of special page on squidoo?
Yes, it is. User generated sales pages for a book. (Sorry Seth.)You can easily create your own by clicking on the banner, “Know a Linchpin? Create a page about them.” in the upper, right corner of the page. It has some usability issues (at least in Firefox on Linux) but I think the timing was perfect to show off how much I enjoy your blog. Take care.
can’t happen fast enough for me! 🙂
I am 100% behind this.Entrepreneurship and immigration are the greatest tools left to U.S. to maintain our status as the greatest economic force in the world.The growth of our nation will depend primarily on these two issues. They are our greatest weapons, especially in response to China.If we attack or hinder the ability for the worlds greatest minds to embrace the U.S. as the place to capitalize on their genius or we impede the ability for people to EASILY start, manage and grow a business the U.S.s role as an economic leader and as the land of opportunity will slowly decline.We need them, more than they need us.All of our protectionist measures will amount to nothing. Like they say in Vegas, never protect a loosing hand.
Congratulations to you and all other proposers of the bill. And thank you on behalf of frustrated Italian entrepreneurs. Now, if you only could commit the $250,000 I’d be on the first flight to NYC.
Insourcing entrepreneurial investment has merit. I assume there are plenty of reasons why funding foreign businesses could be difficult/unattractive (meetings, legal, etc).Opening remote investment offices could provide additional funding opportunities.Investors seek returns. I would guess that the source of this growth isn’t the driving priority.
Hey Fred, long time reader, first time poster. I have a question: Say I’ve got it all – the funding, the awesome product, even great employees/partners lined up in the States. I apply for the Visa and get accepted. In the next 2 years I turn my $1M company to a $100M company. Then what? I go back to Canada? There should be a low paper work, quantifiable way for me to gain US citizenship, otherwise I’m just opening myself up to more risk.
Zach, if you get a visa, chances are that a few years after you will be able to get a green card, which, in turn, will eventually allow you to become a citizen. All this, of course, if you don’t commit crimes and, I guess, if your startup doesn’t fail.
click on the link and read the legislation proposal but i think you get tostay under that scenario
Thank you Fred and all others involved with this idea.
A) I hope you get someone to adjust for inflation in this. And amend about the start of technology- according to you the cost of seed money is radically dropping (though I don’t know waht the bottom threshhold will be)B) This is a stressfest if you raise money and get a visa, because of the two year issue. (what happens as you get close to two years, especially as technology costs change)C)What about the smb (including tech businesses) Not everyone is going to take money and will still end up scaling to provide enough jobs as mentioned in the bill. However the visa is locked to the raising of the money. Really perverse incentives there. I rather have it locked to the business being in the US and providing jobs, rather than some secondary issue. (like the money)Remember, you can always take capital after you reach the threshold of people employed/revenue generation- you can’t get the business here if incentives aren’t structured to get it here first. So I just really want to see a better incentive system….
One more thought: if you do raise money, it perverses the usage of the fund for the company…the company may not need that much in funds…but you the VC may have to give it in order to get the person to stay in the US…So you are in a situation where you may deny money to those who could use it, and over-incentivize people to make companies here for the money and money alone…
You know what would be a great marketing move for this bill?Continue fleshing out the list of companies founded by first-gen immigrants historically.Bonus points if you can find a way to roll Einstein into the picture, but I think his pitch was too scattered to get funding. 😉
This legislation needs to be wrapped up with tax incentives & federal grants to get businesses off the ground. One of the biggest challenge to a new venture is that Tax and startup fees. Operational costs should not burden the founding stages of a new idea….we should be fueled by the government to get started, not road blocked from the beginning.
I thought it should be noted that Congressman (err “Congressperson” ) Polis founded and sold/IPOed of AIS, BlueMountain.com and ProFlowers and Provide Commerce.
Not the first time I’ve made this point here, but you’d get more grass roots support for the Start-up Visa if you paired it with a restriction on importing immigrants who won’t be creating jobs here. The status quo of outsourcing plus insourcing (importing foreign workers) is not politically or economically sustainable when we have the highest unemployment in a generation.Related to this, you may be interested in this comment on the NY Times website, which was recommended by other Times readers. Excerpt:I used to be a member of a professional association for computer scientists, and they still send me an email newsletter once a week. It is revealing what they think of as “news”. It’s not the decimation of my profession, the decline of wages, any issues related to outsourcing or H1-B, the decline of computer science as a major. I have gotten this newsletter every week for years and those issues have not been mentioned once. On the other hand, every single week there is an item on efforts to expand the presence of women in the field.Now I am a woman, and I appreciate these attempts. But what has happened with the rise of ‘identity politics’ is the total suppression of any issues related to preserving our middle class, and what that means for jobs: benefits, job security, outsourcing, stagnant wages, etc etc. It’s like we gained identity politics but lost the middle class.I hate to use these words, I know they are loaded, but the truth is, we need class conscious politics to make a come back in this country.I don’t like this commenter’s intimations of class warfare, but I do understand her dismay at policies that may be helping to hollow out the middle class.
But it’s a zero sum game. When you limit outsourcing and keep the same wages, people can by less. So you are actually subsidizing one sector by another, and there is no end or finite moral rules for that. At the end of the day you can never compete with a player that sells everything for 40%-60% less.But the more technologies that reduce the advantage of corporates economy of scale (a.k.a startups), resources will sink down to people like this women, locally, with less outsourcing.
Aviah, if outsourcing is putting downward pressure on wages, it’s likely that those wages would rise in the absence of it. And it’s not entirely clear that this woman would have a higher cost of living without outsourcing or insourcing. I guess it depends on what sort of workers we are talking about. If we were importing more physicians, who would lower average specialist wages here, lower health care costs (and, consequently, the woman’s health insurance premiums), then maybe. But how is she able to buy more because Microsoft was able to import another foreign programmer?
spot on. I messed with idea a little, but you clarified it. In some areas outsourcing costs reduction propagates to the end customer (health), in some areas it’s just increases corporate profits and that goes to a very thin layer (theoretically through financial markets to everybody, but it doesn’t work). In these cases, (e.g. Microsoft) small hungry startups can compete on innovation and lower margins, drive costs down, distribute a larger revenue share to employees and provide the lower price benefits to the end customers – another gain of the startup visa.
There’s still no way to “like” a post but let me tell you this is the part of America that I absolutely adore. You can create a system where people vote for candidates in any other country but that’s not true democracy. It’s only when people can stand up for what is right and push their government to do it, then you have a country truly ruled by its people.And as a first generation immigrant who started a web business and raised VC funding, this proposal makes a lot of sense and I wish it was there when we started back in 2006 — we wouldn’t have had to spend all the time and money just to secure our CTO a work visa. Most of you probably can’t imagine how hard it is to do that even though he’s highly qualified — a CS Master from Fred’s Alma Mater, U Penn.And most of you probably don’t know either at what rate this country is losing these foreign engineering talent, lots of them trained by top American universities, just because it doesn’t have a good visa solution. To me this is the single most serious threat to this country’s longterm competency and the Startup Visa program is gonna be one of the key policies that can potentially address that.SO DO HELP. Even if you’re not gonna be starting a company with a new immigrant, you need this for America to continue to be a leader in tech innovation and to be a great nation.
great comment jamie. and you are right about the rate we are losing these immigrant engineers. they either aren’t coming any more or they are headed home.
there is one fault in this proposal. The timeline of two years. Two years is too small a time, and will put businesses at risk. It is lucrative for non-american entrepreneurs to set up shop in the US, because it gives them the proximity to the market, but 2 years is too less, and a difficult risk to hedge.I also expect this to be tied up with clauses such as these companies cannot “outsource” so as to protect American labor, thus preventing them from setting up offices in places where costs are lower further reducing it’s effectiveness.
I love phrases like “innovation and technology”. Let’s be honest here. It is extremely rare to find a startup that is so new that only one person has the idea and drive to make it work. For almost any idea I’ve seen funded, I usually see ten others with the same idea that go unfunded. So, how does this help “innovation and technology” except to encourage more people to immigrate and take funding opportunities away from citizens?Don’t get me wrong. I’m not against immigration. I just need to hear more than knee-jerk “we need more in-sourcing” to be convinced it is a well thought out policy.
capital should flow to the best utilizer of that capital, regardless of where they were born. that’s how to make society better.
two words: Nikola Tesla
Thank you for the update. What committees are these bills in? Would it be useful to have special effort go to contacting the members in the committees at this stage?
Fred – With respect to the immigration debate, the vast majority of people on the right are anti-ILLEGAL immigration … not anti-immigration. As a conservative, I’m for this.
@fredwilson @kidmercury et al there are many tradeoffs – in response to kid about economic warefare and to this Start up Visa – on surface it makes sense and sounds good but then i remembered the long standing gov policy of sending hybrid grain to poor needy countries to make into flour but not sending seed/grain that they couild plant and be independent -what do these people benefit – why not do it in their country of origin and given internet nation why do we have to bring them to strange culture too – food for thought – this VISA startup could work and still backfire given how blinded by tribalistic self interest we are in the US of AH, we have outsourced whatever we could under Bush sending everything off shore and then complain about Immigrants taking jobs that nobdy in USA would take anyway – go figure -things are not what they appear to be in the end this is not a democracy but an idiotcracy
I have to say: this would be a very innovative and forward thinking legislation piece. Visas / work permits are amongst the toughest entry limitation to overcome when you want to get started in a country that is not yours.I see a lot of french friends (being french myself and all…) that are under very important stress on top of creating their startups because they’re spending a good amount of time figuring out how to switch from an J1 to an E1, find a company willing to sponsor them for an H1B etc. If we can facilitate that part of the equation and they can focus on the product, getting the company off the ground etc., that’ an enormous incentive for great minds to immigrate.It’s true, you probably need some filters to make sure you’re really talking about creating a startup (and not a way to get around immigration legislation). I don’t know if it should be the money raised, given that it’s often easier to get funded locally if you’re already there but that should play a role.
It’s interesting that the startup visa was first proposed my Paul Graham, but based on the minimum investment thresholds outlined by the Kerry/Luger proposal, a company that only takes YCombinator funding would not qualify for a startup visa. I wonder if this proposal meets Paul’s original intentions.My guess is that Paul can still fund foreign entrepreneurs and bring them to the US under a different, more temporary visa, and that the Startup Visa is so that the best entrepreneurs Paul funds won’t be forced out of the country if they are able to get additional funding.
a 90 day tourist visa may not be long enough to participate in Y Combinator
Also, the terms of a tourist visa usually forbid searching for a job. It may allow to do business, but always considering that you are going back to your home country. I’m not sure how this would apply to searching for funds: maybe the VC will let you go home with his money, but he will probably ask you to stay, so that could be considered a violation of the terms of the visa and you could get expelled from the country and have problems to enter again.
Great work so far. Take it all the way.
I think your cause is something that deserves support. My grandfathers were first-generation immigrants who started businesses and registered patents and my children’s father was a first-generation immigrant who started a business. If these immigrant themselves do the money-raising and attract the capital, good for them! Of course, there are profound social problems engendered by their self-interest (and yours, in needing their cheaper labour). There’s the dislocation in their own societies they leave due to the brain drain. India, Russia, China, these countries all have serious poverty and human rights issues these brains could be helping. And the social problems here with the dislocation they cause and job loss of older citizens also from immigrant groups originally are also all real problems. That’s why it’s more than ok to debate, dissect, discuss all of these issues, but hopefully find a way to keep American open to immigrants and encouraging to immigrants with bright ideas who attract funding.Now here’s my beef with your whole shtick, Fred. The notion that what you are doing isn’t “lobbying”. That it is sanitized somehow and pure in some cybertronic way. Baloney. You are lobbying as much as any PAC. And worse, we have less accountability from you as a result. How did you and your pals get ahold of these senators? Let’s say some foreign company, PR firm, even foreign government paid you money to make this contact. How would we know that, as you aren’t registered as a lobby, don’t have open books, and we can’t see the Sunlight Foundation dbase on you and your gifts.And what a crock that you have no budget, advisors, or expertise. You *are* the advisors. And you have a budget — it’s called “my venture capital company that sustains me and my expenses on this caper”. What, you did this with only an…i-phone? A twitter? No lunches in Washington? Let me guess. You opened up the senator’s email template on their web page and just wrote in to them?I speak as someone with one degree of separation from Sen. Kerry as it happens. So I’m not stupid about how these things work.There’s also the issue of why, say, a tech company should get privileged treatment, and not, say, a great idea for a restaurant or a non-profit organization or a dance troupe.
when i say no budget, i mean it. nobody spent a dime on this to date. not one penny of my firm’s operating budget was spent on this. we simply used our blogs and email and some phone calls to get this done.
great initiative. my biggest concern as an entrepreneur would be that the ‘qualified investor’ have some checks to balance for that strong position. for example, if i’m founding a company and i want to move to the US, the ‘qualified’ vcs get a very strong negotiating advantage upfront. and then they have a huge potential squeeze on every business decision – not the 1 board seat squeeze, but the ‘if you don’t do this you know we can have you and your whole family deported squeeze’. i’ve seen similar dynamics with work visas in other countries and if things get too rocky, people always think family first and just go back to their home country.that said, i might be one of the first to try and sign-up for this visa if it goes through as i am building a start-up while in the US on my wife’s working visa…..but when that expires, we’ll need to decide if we have to go, or i would somehow become the primary visa for us.
Fred what would be very help and add power to the startup visa moment is actual hard numbers on firms that were founded by immigrant entrepreneurs over say the last 30 years and the jobs created. Surely there is an economist out their with the numbers of jobs created and their impact on the economy. There is a multiplier effect also it’s not just the job at the companies, but jobs created at companies that provide products and services to startup and their employees.
To all those concerned about “stealing talent” from underdeveloped countries I would say that that idea has a very big flaw. To steal something you need a previous owner to whom you steal that precious thing. However, in this case we are talking about people, who are not owned by their country.Why should that person be obliged to stay in his country if he wants to leave and has somewhere to go where he is accepted? Individuals should be above countries. People don’t owe their life to their country. If something can be said it is the contrary
Here in Alabama HK Motors is a start-up proposing to make hybid cars. Although there is a base investment by a small group, most of the capital is coming from the Visa program that already exists. I think it must be working.
Kerry is an idiotThe EB5 visa already does this. http://en.wikipedia.org/wik… and http://tinyurl.com/yh5a26rAlso (for many countries) the E1 and E2 visa. See http://www.usembassy.org.uk…Also lets not forget for true entrepeneurs the EB1 MultiNational Manager or Executive would also provide for such see http://www.murthy.com/eb1me… and http://tinyurl.com/yl7lwoq
@yankeegohome: there are in fact huge technical differences between the EB-5 and the new proposed legislation: 8 USC 1153 (b) (5): http://bit.ly/9Pu2BVPlease read the law carefully before you call Senators idiots. One lesson I learnt from selling my first start-up is that small details are all that matters in the end.The EB-5 requires the entrepreneur to invest $1m of his own money. That provision is actually the *crux* of the problem, and the reason why an alternative to the current EB-5 is needed. $1M represents an enormous amount of money for the overwhelming majority of the young PhDs/post-docs from MIT/Stanford who develop the real, hard-science, cutting-edge technologies that will power the next wave of innovation.The general H-1B mess and the endless pathetic trolls on TechCrunch about offshoring, indians v. Klanmen and rednecks v. liberals, and trigger-happy-world-bank-hitmen (it’s funny, I’ve worked for the World Bank for a short while, and haven’t managed to kill anyone — I must have missed on the action) etc. simply *don’t matter* here.What matters is how Silicon Valley can make sure that the very, very best entrepreneurs from the world over will choose its shores for their future endeavors.The reality today is that the very small set of extremely talented engineers and scientists (maybe ~200, at most ~1000 for every class year) who are inventing the next generation of technology, and for all intents and purposes hold the future of the world in their hands, all face an excruciatingly hard choice: flying back home after graduation, and settle for an environment where one direly lacks the human and financial capital, the drive and the social fabric needed to make startups blossom, and where scientists strictly stick to academia and rarely dream of changing the world; OR risking everything to launch their company in Silicon Valley, but with no assurance whatsoever that they will be able to navigate the current immigration law without endangering their company, their employees and their investors.Today, if you’re an entrepreneur with no money, little connections but a freshly printed PhD and an earth-shattering technology, you are left in a dire position if you elect to stay here to bring your scientific discoveries to market: you shouldn’t technically sponsor yourself for an H-1 visa (though some try, or cross-sponsor their co-founders); you technically can’t be a CEO/CTO on a TN-1 (though some try it too); the O-1 visa is extremely hard to secure and can’t be counted upon; and the most prestigious scholarships offered to international students (Fulbright, etc.) force people to go back for 2 years in their home country before being eligible for a green card.If the challenges of launching a company weren’t trying enough, you also have to navigate the intricacies of immigration and citizenship law in a non-native language and a new country, all the while creating a company, attracting investors, building a team and a technology, and reassuring everyone that you will somehow find a solution to convince the Department of State of letting you stay in the country. That is a surefire recipe for massive cognitive dissonance and precocious bankruptcy filings.
The bill currently under consideration in the Senate solves a very specific problem: those young scientists with no money but a technology that has enough world-changing potential to get VCs interested [odds of successfully closing a series-A round for startups which seek VC funding: ~0.15% — we’re talking of the cream of the crop here], you are allowed to stay in the US, launch and manage a company in the open, and give the world a chance to see your technology come to fruition (and California a chance to reimburse its debt thanks to your future corporate income tax payments).Again, I know that the H-1B issue is the ultimate third rail issue. Rest assured that no one is happy about it: neither the immigrants who suffer through its maze of bureaucratic non-sense, nor their employers who spend millions of dollars on legal services billable hours, nor the American citizens who see its abuses and fear the competition for their jobs.What is at stake, and what really calls for an alternative solution (again, not a reform – just a new solution specifically tailored to an edge case of very low likelihood but critical importance), is the hardships that the current immigration policy visit upon the small crop of entrepreneurs with actual world-changing, meaningful technology IP in their quest to bring these to the marketplace.The StartUp Visa solves this issue masterfully (except for its failure to repeal the 2 years home residency requirement of J-1 visa holders who came to the US on a Fulbright scholarship). It is a brilliant example of a practical, customer-centric and ideology-free piece of legislation solving a precise problem with very low risks of unintended consequences. One day your grand children will learn about the Kerry-Lugar Act of 2010 with as much awe and as much gratitude as we continental Europeans learn about the Marshall Plan of 1945.
not just P&G or Google, but 99.9% of all great companies (and not great ones) were started by immigrants. unless one is a pure blood native american, then all americans are either immigrants or descendants of immigrants.open door immigration (and yes, amnesty!) is and has always been mission critical to the success of the american experiment. welcome, all.
I personally don’t like the idea. Not that I am against good foreign ideas – but, I feel we should think U.S. first. I know that investors are struggling with deal flow and why not try to find ways to get the deals to come to them. But, I also believe in my country and the innovation abilities of our own people. Why not create a bill that reduces barriers for people in this country to develop and build ideas – that would help us and the investors.Now, when we exhaust all the innovation or potential innovation in our own country – then open it up. But, I think we should first think about finding ways to reduce the barriers to innovation cultivation here first.
Frankly, I don’t think it works like that. It’s not: let’s dry down on our local innovation and then when it’s dry, let’s open up. It’s all about creating the conditions to get great minds to interact together (I don’t really care if that mind is from Pakistan, Wyoming or Germany). Protective policy only end up producing bad products. Why is the US so behind a lot of european countries on nuclear energy? One of the reasons might have to do with the heavy entry barreers you have there. I really believe that getting as much innovation as possible from wherever it’s coming from as long as it happens on the american soil is good for America as a whole.
Fred, I am sorry to break the fun but senator or whoever drafted the bill for them have inserted a bomb that will put most early stage proposals at risk. There are 3 conditions for visa status to be met over 2 years. 5 jobs; $1M in further funding; $1M in revenue. All to be met in 2 years. If they are not met – visa is revoked (and sponsors apparently get a black mark). Go from zero to $1M revenue in 2 years is a challenge that many fail. In other words, if Twitter were an immigrant company, its founders would be packing their stuff now.
I think either condition needs to be met, not all of them. The trick thing if that condition which was met after two years is not met anymore during the 3 years that follow (for example if your sales go down, or you have to fire people), you might lose the green card.
No. Read the bill at one of the links above – the language is very clear. It is ALL OF. There is nothing there about 3 years that follow, though, you probably confused it with the 3rd year during which the visa must be repealed. So if you get all done by year 2, and then sales plunge, you are ok.
This is a highly-relevant post for me, Fred. I’m Australian, but have founded several US-based companies since first coming here in 1987. I have also worked as a senior executive at a billion-dollar start-up founded by a non-US national. I’ve witnessed many fellow foreigners start successful businesses here.The effect of creating these start-ups has been almost universally positive for the US economy. Tens of millions of dollars have flowed into the US (US venture investment was matched by investment capital from outside the US in almost all of these ventures), hundreds of jobs created for US-based employees, and global distribution opportunities created for new US products and services.Numerous smaller companies have benefited as well – law firms and audit firms, local development shops, programming houses, marketing firms, landlords, and recruitment firms.Contrary to some of the comments on this post, the home countries of the entrepreneur have probably benefited the most. In fact, my firm view is, building a product in the US enables en entrepreneur to better serve their home country.How? Building a product in the US enables scale and quality that can’t be achieved in a smaller, less-experienced market. There are more experienced resources that can be drawn upon here, and, critically, the size of the market enables larger initial investment, which allows the foreign-born entrepreneur to distribute back to their “home” country a US-built product with maturity and breadth far in excess of what would have been possible without relocating to the US.These results remain true for every foreign-born entrepreneur that I know – being in the middle of the world’s largest market enhances one’s ability to add value back home, while not detracting in any way from the US economy, or US entrepreneurs: there is simply too much opportunity in this country for foreigners to have any kind of negative effect.
Very interesting perspective. Definitely promising for aspiring entrepreneurs (like me), to look for more avenues to expand. I would like to keep my fingers crossed and look at the future developments on this area.:)
The StartUp Visa bill is great. It is an exciting way to raise the discussion on how to leverage immigration as as job-creating stimulus. And its cost-efficient!It is interesting to see Congressional leaders not afraid to acknowledge that innovation, job-creation, and American technology leadership depends on an ability to attract and retain the world’s best, brightest, and most entrepreneurial.But really fascinating is how the Startup Movement began with some venture capitalists like Brad Feld, Dave McClure, Mike Speiser and others, who became frustrated with an antiquated immigration system that bears little connection to the demands of the New Economy.They saw numerous examples of international students, or H1B professional workers, or inventors overseas who had great technology or ideas for a new business, but couldn’t secure immigration status to make it happen in America. As opportunities continue to expand in China and India, more and more internationals were giving up on the U.S. and going back home to test out their business idea.It has been well-documented by Vivek Wadhwa and others that the America is experiencing the first brain drain in U.S. history. http://www.businessweek.com…So Feld and company came up with the Startup Visa concept, and began building grassroots support around the country, using the web ( http://startupvisa.com/ ), twitter, and other social networking platforms. The group is also not afraid to take a few trips to D.C. to make their point face-to-face.This is an inflection point in the immigration reform debate. The entrepreneurs and the people behind the entrepreneurs are beginning to make their voices heard. They need to tell their story to America and explain how the word “immigrant” can mean “job-creator.”When the venture capitalists speak, everyone listens. Or at least they should listen. They are the talent scouts, the explorers, on perpetual mission to find the next big idea, the next Google, Intel, or Sun Microsystem. They provide more than just money: they provide the coaching, the networking and the helpful early management to get an idea to market and grow.Take a listen to what some of the biggest VCs are saying about immigrant talent & entrepreneurship:Michael Moritz/Sequoia Is not fluke that Seqoia has backed many other immigrant-founded companies, including Google, Yahoo, Paypal, YouTube, LinkinIn, Nvidia, a123systems, and others. In fact, the website for Sequoia proudly proclaims their attraction to immigrant newcomers: “UNDERDOGS. The collision of intelligence and ambition with opportunity is unbeatable. Almost everyone we have ever invested in has been a complete unknown at the time we met. Many have been immigrants or first generation Americans with barely a penny to their name. Underdogs are our favorite kind of people.” Sequoia’s Michael Moritz, a former board member of Google with a net worth reported at over $1 billion and listed as one of Time’s most influential 100 people in the world, has written: “An entrepreneur without passion is an empty vessel. Anyone who starts a business — and wants it to last — needs this quality. It is a journey against all odds. Every business starts with one or two people, an idea and nothing else — no employees, no money, no product, no customers and no shareholders….Force venture capitalists to choose between a well-heeled Ivy League student and a smart and impoverished immigrant, and we’ll pick the latter every time. The lily-livered need not apply for a life at a start-up. Tenacity is a necessity.” In 2007, before the Cardiff Business Club in his native Wales, Moritz had this to about immigration restrictions of high-skilled talent: “It’s no coincidence. You go around most of these companies and….all of the founders and very early employees are either an immigrant or a first-generation American. That has been the fuel that has propelled these companies”—————— John Doerr, Partner, Kleiner Perkins Billionaire, investor in immigrant founded companies: Google, Sun MicrosystemThe day after Barack Obama was elected president of the United States, VC John Doer was asked this question at the Web 2.0 Summit in San Francisco:“What should the new Chief Technology Officer of the U.S. Government do?”Doer responded with his immigration reform mantra: “staple a green card to the diploma” of any international student graduating from a U.S. university with a degree in engineering. Vinod Khosla, Khosla Ventures, former General Partner Kleiner & Perkins, co-founder Sun Microsystems, billionaire, a founder of TiE“How many jobs have entrepreneurs, Indian entrepreneurs, in Silicon Valley created over the last 15, 20 years? Hundreds of thousands I would guess.” Vinod Kholsa in CBS news. Guy Kawasaki, is a managing director of Garage Technology Ventures, an early-stage venture capital firm and an author. From his blog: How to Change the World: A practical blog for impractical people “How to Kick Silicon Valley’s Butt: Encourage immigration: I am a third-generation Japanese American. My family moved here to drive a taxi and clean white people’s homes. If I had a choice between funding someone from a family who moved here from Vietnam whose father and mother run a 7-Eleven verses a descendant of a Mayflower passenger with “IV” in his name, I’ll give you half a guess as to my preference. You need to encourage smart, hungry, and aggressive people to immigrate from around the world. Add to do that, you need good schools. To mix several metaphors, if you want to cover your ass, you need to open your kimono because trust fund kids don’t make good entrepreneurs.”In 2006, the National Venture Capital Association, which represents the people and firms that invest in young, risky, fast-growing companies, put hard data to these observations. It sponsored a deep look at the kinds of people its members were bankrolling and published its findings in a report titled, “American Made: the Impact of Immigrant Entrepreneurs and Professionals on U.S. Competitiveness.”And what an impact. Looking at businesses launched between 1990 and 2005 with money from venture capitalists, the researcher concluded that immigrants were behind one-fourth of all public venture-backed companies created in America. Add a high technology label, and the immigrant share soars to 40%. The study showed that the market capitalization of U.S. public companes that were founded by immigrants and backed by venture capital was $500 billion.Some of those immigrants founded companies that became icons of the New Economy:Sergey Brin, a founder of Google, immigrated from Russia;Vinod Khosla, a co-founder of Sun Microsystems, was born in India. His partner, Andy von Bechtelsheim, came from Germany.Pierre Omidyar, the founder of eBay, was born in France to Iranian immigrants.;Andy Grove, a founder of Intel, immigrated from Hungary.Jerry Yang, c0-founder of Yahoo, came to America from Taiwan.Elon Musk came to America from South Africa and later co-founded PayPal.Those are just the rock stars of the New Economy. In companies small and large, some famous and some you’ve never heard of, immigrants are often the ones pushing the envelope, introducing ideas, defining the state of the art and creating new industries and jobs.Perhaps venture capitalists who are also immigrants possess keener insight into the immigrant advantage.Six out of the top Vcs on the 2009 Forbes Midas List of top 100 Vc’s are immigrants, including Moritz at #2, and fellow early Google funders David Cheritan, Andreas von Bechtolsheim and Ram Shriram. Big companies start out as small companies. If Congress and the President follow the advice of the VCs, maybe some of the Startup Visa holders will turn out like some of America’s earliest immigrants who founded icons such as DuPont, Pfizer, Dow Chemical, Procter & Gamble, Levi Jeans, and U.S. Steel.The VCs are willing to bet on it.Sure Americans may not like to hear that immigrants are nearly twice as likely to start a business and be granted a patent, more likely to hold an advanced degree, and that 50% of the tech companies in Silicon Valley were founded by immigrants.But isn’t it time that we got over the insecurity of our own deficits, and learn to partner with foreign-born entrepreneurs and innovators to usher in a stronger America?Richard HermanCleveland, Ohiohttp://www.immigrantinc.com/http://www.youtube.com/user…
I can find incredible mounds of founder expertise on the web (and I have :).Startups need hands on folks more than any other resource.I’ll go without a lot to found a growing business, but I can’t do it without other dedicated minds. Attracting passionate early employees/founders is tough without giving away the ability to make decisions for the businesses.It almost makes sense to start a hot dog stand to generate enough revenue to hire engineers/designers to design a service with traction.If a remote founder team has already found traction, of course it makes sense for the US to welcome them.
I love this idea too. But I do think such a program should be put into place with the intent of expanding to other sectors and even include US entrepreneurs. If we think about the number of start-ups that actually succeed and grow to be the next Google, Microsoft, IBM, etc. – why not have a plan to roll-out to a larger playing field?I don’t buy into all of the benefits listed by Charlie (tho I do think some are great). I look at my father who opened a small clothing store in the late 60’s selling a few key products that everyone said would never work in the location that he decided on. They were wrong – he found a great niche and he’s still in business 40 odd years later with a strong clientele. No one ever offered him free healthcare, free guidance, tax breaks, etc. So not sure why we would want to hand these out to one individual over another based on sector focus… it almost seems like saying that one sector is worth more than another and I just am not sold on that.
That business may already exist….
why do we embrace free market EXCEPT when it comes to people and labor.
because the impact of skilled immigration yields in the long term. America’s current wealth is built upon hard work of motivated and talented immigrants from prev. generations.The full impact of draining this stream will be felt only 2-3 generations from now. But than it will be hard to fix.
Maybe you’re onto something, Mark. You could start the hot dog stand first, and then hire the engineers and designers to automate it. Call it the Autodog (in homage to the old Automat). You could shape it like a big hot dog, maybe with a window through which people could watch the mechanism work. Hire Charlie’s consulting company to figure out how to mass manufacture it. Roll it out nationally.
I agree with you. But most of the country doesn’t. My question was meant for those who don’t agree with us, those that argue Obama is a socialist, the moral hazard for business, yet immigration needs to be curbed.Employment should be market driven as well. If an immigrant can do a better job, for more or less hire away. It will drive the very market forces many complain we don’t pay ENOUGH attention to.
Of course Charlie, get things done by being part of the solution.
What about the case of unskilled immigration? Many small businesses seem to prefer hiring unskilled immigrants over native workers. There are three problems with this though, from a socioeconomic perspective. The first is that these unskilled immigrants tend to consume more in government resources than they pay in taxes, so this is a case of the businesses privatizing their profits from cheap labor and socializing part of the cost.The second is that our native unskilled citizens are still here, and still unemployed. We can’t swap them out with unskilled immigrants from elsewhere.The third is that these unskilled immigrants often have kids who eschew their parents’ unskilled jobs, but are unable to get better ones. There was an NYT article about this last year, if memory serves, focusing on the children of Salvadoran immigrants in the D.C. area, but you find similar stories elsewhere (e.g., the lack of advancement over four generations that Telles and Ortiz found in their landmark study of the descendants of Mexican-American immigrants).During periods of high unemployment like we have now, I would limit skilled immigration too, with a few exceptions, e.g., the start-up visa mentioned here, the rare world-beater in a particular field, and qualified physicians (if we could smooth out some of the regulatory hurdles associated with that) to help lower health care costs here.
No problem.BTW, any word back yet from your financial adviser friends?
OK. Thanks again for sharing the info though.
not familiar with L1’s. How does that work? Is this a large percentage of the legal working immigrant population? I don’t support unfair environments, but I do support open legal immigration. I agree L1’s should be fixed if this is how they work.But, Protectionism has never benefitted anyone or any country.
@Charlie, Why talk about things you know nothing about? I have worked on a L1 visa in US for 5 + years and I paid every single one of the local,state, federal tax you mention, including Social security which I will never get back. I got fed up finally with a crappy immigration system, which would have taken me 10-15 years working as a slave with no promotions to get a green card. I returned to India, and have been working as a freelance software consultant to american companies ever since from India and have never been happier. I own my time now, do not have to constantly worry about my visa getting expired/being thrown out of country because I am laid of. I work for the best, and thanks to cheaper cost of living have a huge saving potential. Good bye America, it used to be the place where it was most exciting to work for, but other options are opening up now