Yesterday, Mike Bloomberg went to Washington and spoke at the Council on Foreign Relations on the topic of immigration reform. The text of the entire speech is here. I just read the whole thing and I'm encouraged and excited that the chorus for intelligent immigration reform has gotten louder. This quote was my favorite:
we must stop telling foreign entrepreneurs to build their companies in other countries
We have seen so many great entrepreneurs struggle with visa issues over the years that we were founding members of the startup visa movement. In his speech, Mike Bloomberg specifically called for passage of a startup visa provision:
A foreign entrepreneur with backing from American investors should be given a temporary visa to start a company in America. If after two or three years, the business has successfully yielded new American jobs, the entrepreneur should be allowed to continue to run his or her business and receive permanent legal status. We are a nation of entrepreneurs because we are a nation of immigrants and in the 21st century, the global economy will revolve more than ever around entrepreneurs.
But he didn't stop there. The Mayor of our fine city also proposed the following reforms:
– A green card stapled to a diploma:
We are investing millions of dollars to educate these students at our leading universities, and then giving the economic dividends back to our competitors – for free. The two parties should be able to agree on a policy that allows any university graduate, with an advanced degree in an essential field, to obtain a green card – and a chance to help us grow our economy. We must allow these students to stay here and be part of our future or we will watch our future disappear with them.
– More H1B visas:
right now, the cap on H1-B visas and green cards is much too low, and caps on green cards are set by country. So Iceland gets the same number of visas as India. That may be fair to each country, but it’s not fair to American businesses. We should end these arbitrary limits and end the cap on the high-skill H1-B visas. Let the market decide. It’s basic free-market economics – and both parties ought to be able to get behind it.
– immigration reform for agriculture and tourism:
we must ensure that major industries, such as agriculture and tourism, that rely on those workers just starting up the economic ladder have access to foreign workers when they cannot fill the jobs with American workers. These employers want a legal work force, but our current system makes that extremely difficult. Farmers have to go through multiple levels of approvals to do basic hiring, and in Georgia, where they have cracked down on illegal farm-workers, farm owners are experiencing severe labor shortages. That’s driving up their costs and leaving crops un-harvested. At a time when food prices are rising, this is the last thing American consumers – and farmers – need.
Do yourself a favor and read the entire speech. It's not long. Mike lays out a sensible and intelligent way to reform immigration laws without getting into the contentious issues that have held back immigration reform for many years. And if you agree with the Mayor, do everyone a favor and call your elected officials in Washington and tell them you are also for intelligent immigration reform (as opposed to comprehensive immigration reform). I've done that and it has helped. Getting your voice into the chorus on intelligent immigration reform would be helpful too.
Last night my partners and I hosted a fundraiser for NY's senior Senator Chuck Schumer. I've written about my fondness for Chuck on this blog before and I remain a fan and supporter.
Chuck told a story to a small group that had assembled before the larger event. He said that he was meeting with the CEO of Deutsche Bank and asked him "do you think the US will be the world's leading economy twenty-five years from now?" The Deutsche Bank CEO said "of course." Chuck said "not many americans feel that way right now." And the CEO said "America is the only place in the world where anyone, no matter what race, religion, background, can be accepted in business and society and realize their dreams and make it to the top. That doesn't happen anywhere else."
I might disagree with the CEO just a bit. I think Australia and Canada are very similar to the US in that regard. But his point is important and worth blogging about, which is what I am doing.
A welcoming society is our history and that is the special sauce that the US brings to the world economy. We welcome entrepreneurs large and small in the US and support them and celebrate their success and forgive their failures. And I am so very proud that I am a citizen of this great country.
But we have turned inward in the wake of 9/11 and the "war on terrorism." And that is hurting us. The terrorists have achieved their goals if they turn the US into a country that no longer welcomes the best and brightest from anywhere with open arms.
So I was thrilled to hear Senator Schumer's optimism last night that we will get "comprehensive immigration reform" in 2011, after the midterm elections. I hope and suspect that will include visas for science, technology, engineering, and medicine (STEM) grads. I hope and suspect that will include the startup visa. I hope and suspect that will include a lot more H1B visas.
Immigration reform is one of the most important issues in the startup political agenda which also includes net neutrality, patent reform, and a number of other important issues. I know that many of you share my passion for this issue. Let's keep up the pressure on our elected representative to do the right thing and give us comprehensive immigration reform as soon as possible.
Last month congress passed and the President signed an $18bn jobs bill "providing tax breaks for businesses that hire previously unemployed
workers and extending funding for infrastructure and transportation
While I can't argue too much with the idea of using tax breaks to spur hiring and investing in infrastructure, I think smart immigration reform might be a better way to create jobs in this country. Tom Friedman agrees and in today's NY Times, he writes:
“Between 1980 and 2005, virtually all net new jobs created in the U.S.
were created by firms that were 5 years old or less,” said Litan. “That
is about 40 million jobs. That means the established firms created no
new net jobs during that period.”
“Roughly 25 percent of successful high-tech start-ups over the last
decade were founded or co-founded by immigrants,” said Litan. Think
Sergey Brin, the Russian-born co-founder of Google, or Vinod Khosla,
the India-born co-founder of Sun Microsystems.
It is not surprising that new companies are creating the jobs in this country. Most businesses don't last forever, they start, grow, hire, eventually get fat and happy, stagnate, and then fail or are sold off. Add to that assertion that technology is changing things and that companies based on older technologies are likely to suffer and decline, and you come to the obvious conclusion that new company formation is the key to job growth.
That second quote from Friedman's piece is about tech jobs, but I would bet that immigrant led business creation is not limited to tech companies. The "fat and happy" thing is unfortunately true about many US citizens. But immigrants are rarely "fat and happy" so they work hard, start businesses, hire employees, and build companies. That's the american way. To quote again from Friedman's piece:
What made America this incredible engine of prosperity? It was
immigration, plus free markets. Because we were so open to immigration
— and immigrants are by definition high-aspiring risk-takers, ready to
leave their native lands in search of greater opportunities — “we as a
country accumulated a disproportionate share of the world’s high-I.Q.
We need smart immigration reform in this country. We are not inviting many of the world's "high-IQ risk takers" to come to America any more. And worse, we are asking many of them to leave. That must change.
Regular readers of this blog know that I'm a big fan of the startup visa idea and have been working to get it made into law. That is a small, but important, part of the bigger challenge. We need comprehensive immigration reform in this country. We have always been open to immigration in this country. It is fundmental to what this country is. We cannot change our approach and expect to continue to have a prosperous country.
1) You have to find investors to get a Startup Visa
2) Once you've obtained a Startup Visa, your personal founder's risk goes up
3) It's bad for investors because the best foriegn entrepreneurs will self select out of this program
Those are all valid arguments and I appreciate that he is raising them. But to suggest that the Startup Visa Act "must be stopped" because of them is ridiculous.
Let me tell you a story. In the summer of 2008 I met one of the founders of Zemanta in London. I heard the story about how two of the founders had won 2007 Seedcamp and how they had started a company in Ljubjiana Slovenia with the funds they secured from Seedcamp. I was by that time already a Zemanta user and really liked the product. Seedcamp and the other seed investors offered our firm the opportunity to join the seed round and we did in the fall of 2008.
In early 2009, I suggested that the two founders move, at least temporarily, to the US so that they could build out the business side of the company here. They did so, but only on a tourist visa. And when that tourist visa ran out, both of them had to go back to Slovenia and wait a long time to get a more permanent visa. Both are now back in the US building the business, but the time they were kept out of the US was a critical time in the business and the company suffered from having them away. Time was lost and you can't get that back.
Had the startup visa act been the law of the land, they could simply have applied for and been awarded a startup visa right after securing their seed funding. None of this would have been an issue.
The startup visa is not just for entrepreneurs, like Pascal, who are thinking of starting a company in the US. It is also for the entrepreneurs who have already started a company and want to build their company, or part of it, in the US.
Pascal is thinking about this a binary choice and it is not. We have a suboptimal visa system here in the US for entrepreneurs. The startup visa will not solve all the problems. It is not a perfect solution. But it is a very good idea and it should not be "stopped." It should be made into law. Then entrepreneurs like Pascal can decide if they want to take advantage of it or not.
While I do not appreciate the headline that Business Insider put on Pascal's post (much as I don't like the headlines they sometimes put on my posts when the re-run them), I do appreciate the debate over the Startup Visa Act. Anything that is going to become the law of the land should be subject to debate.
So in the spirit of debate, here are some more posts on the startup visa act:
I'm in London for Seedcamp 2009 and I've been spending the day with entrepreneurs and technologists from all over europe. It's a reminder that the world is full of great entrepreneurs and technologists.
I started my day in a board meeting with one of our companies that was started in Europe. It turns out one of the founders of that company, one that is growing and hiring in the US, cannot get back into the states right now because of a Visa issue.
That is infuriating to me and to the founder in question. His risk taking and the innovations of him and his partners and team members are creating a business in the US and creating jobs and wealth that will largely stay in the US. And he cannot even get into our country right now.
This is nuts. I've got an issue with our immigration policies generally, but specifically we should modify our rules around Visas for founders and key team members of startups that are at least partially based in the US, particularly if they have been well financed by angels and VCs.
Fortunately, there is a growing political movement called The Startup Visa movement and there is real momentum behind it. If you are close to your legislators, particularly representatives and senators, please bend their ear on this issue. Though I am not close to the politics around this issue, I suspect this is not a hard issue to get behind politically. Nobody is losing jobs because entrepreneurs around the world are starting companies that are based, at least partially, in the US.
We should make it easy for these people to get back and forth into our country. And with your help, I suspect we will.