Senators Kerry & Lugar Introduce the Startup Visa Act
startupvisa.com
startupvisa.com
Edit: Above I said "a 3-5 year line," which is inaccurate. The current line is 7-9 years long.
Questions like that cannot be answered in any definite manner. If the rich use their capital to create wealth, then it benefits the country. If the rich use it to alter public policy to their advantage, then it harms the country. A new visa process should not enable the rich to game the system unfairly to their advantage at the expense of other prospective applicants.
The rich are in no way obligated to share their wealth with you - as the Canadian government has unfortunately learned. Our immigration programs have three paths: skilled labour, investment, and entrepreneurial. Skilled labour is simply letting people in who have skills we need, investment expects that you invest a $HIGH_AMOUNT into the Canadian economy (with the expectation, not requirement, of more), and entrepreneurial requires that you run your own business for $TIME before you qualify for citizenship.
The first category is usually a win for the country, since these people seek employment and are taxable, not to mention you didn't have to pay for their education.
The second and third categories are fundamentally broken - I personally know many families who do the absolute bare minimum to hit the permanent residency requirements, and keep all of their wealth off the books in Asia, bringing them in literal suitcases of cash (staying just under the declaration limit each time). Heck, I know families that are receiving government benefits for low-income families even though they have millions in property overseas.
My point is, unless you require rich immigrants to give up a huge chunk of money just to get in, expecting that the rich will contribute to your tax base is IMHO misguided. These people are already rich, for cryin' out loud.
That said, Canadian law tends to tax people on Canadian earnings. (Or at least it did the last time I paid attention, which was admittedly 15 years ago or so.) Which contrasts to US law that taxes US citizens on worldwide earnings (though the US does give a large exemption for foreign sourced income that keeps this from affecting a lot of people).
A lot of countries have a lot of rich people at the helm and aren't really, what I would call, benefiting from that. It could even be argued that a lot of the problems in countries are caused by the rich.
I think about it kind of like this: We all want to keep getting richer. I just take that as the rule from which I derive a couple more points on this topic.
First, to be a noticeable increase in wealth, that increase must be appreciable. It must be felt by the wealthy person. I think to appreciate it, it must be a certain percentage change. We probably wouldn't notice a 0.05% increase in our wealth, but we would notice a 50% increase.
Second, assume rich people and poor people desire an equivalent feeling of wealth growth. If I make $10k a year, $1,000 more next year will feel great. I'll have almost $100 more to spend a month. Someone making $100k desires an increase in wealth of $10,000 a year.
Now, if we spread that $10,000 worth of wealth created to make the rich person feel better to the poor people who only needed $1,000 additional a year to feel better, we could have made 10 people happier, instead of just one person happier when that money went to the rich person. $20,000 worth of wealth could make 20 people happier, instead of 1 rich person and 10 poor people = 11 people.
If you believe in Greatest Good for the Greatest Number anyway, but not all subscribe to that philosophy. I do I think. If one person experienced elation at the expense of the whole world, would that be good? Not to suggest that I would offer to harm a minority to bring joy to the world. But I do wonder if growth is beneficial. I think it may not be. It could be bad.
So, I am not sure how to answer your question. I do not know for a fact if it is in a country's self interest to encourage the growth of the investor class with at least $10M in the bank. It may take a lot of stagnation or depression among the working class or creative class to create additional wealth for an already rich minority.
Further from that, if you raise the foundation, quantified as the poverty line perhaps, then it increases the quality of everyone's lives, even the rich. There's less crime, less blight, and people are simply much more pleasant to be around than when there are huge disparities between the rich and the poor.
This is a bit tangential, but I think it's quite important - Greatest Good is a very important belief for someone to consider, and you've written really thoughtfully and introspectively. Here's my perspective, which is a little different:
Sometimes I voluntarily do things to make other people happier. I donate to St. Jude's Children Hospital in the USA, and I've run two small charity events for Great Ormond Street Children's in London, raising a tiny bit of money for sick kids and their families. When I was younger and Catholic, I also volunteered for the Catholic Arts Festival, and I've volunteered at soup kitchens. I spend lots of my time teaching pretty much anyone who cares at all whatever they want to know, including last month teaching a really nice 26-year-old kindergarten teacher how to negotiate for better pay after she got an offer at a great school but they were offering below market pay. I spent three hours teaching her how to negotiate, see others' points of view, and leave it open for them to raise their offer without increasing hostility. I did this just because I like to do good things, I didn't get anything in return except a feeling of doing something good.
So, I really like helping people. But once someone says, you need to help this person, or you're in trouble - my skin crawls. I hate it. It sends every signal to me to resist, to fight, to fight back, to counterattack, to throw off these mandates and chains people would place on me. They want my resources by force? They want my time by force? They want to restrict freely where I can go, and what I can do, and who I can trade with, and what I can buy for myself, and what I can do in my own home, in my own company, with my own friends, and so on, and so on?
To that - to that I say no. Or rather, if they've got me out-gunned, I submit, but I grit my teeth and submit. You see, I think I aim to make myself overwhelmingly a net positive anywhere I go. I try to be polite and respect local culture, share the best things from my culture, teach people, learn, work, prosper, and make others prosper. But frequently people say, "We could do even more good!" And so, with that justification, they limit my mobility, or give a regulator the authority to regulate a transaction between me and another person, or pass a tax, or conscript, or close borders, or so on.
I'm against that all tremendously. So this is an alternative perspective on Greatest Good for Greatest Number. I'm against it, because I know I do right by people, and I feel comfortable ethically with how much I contribute. I feel pretty good about what I do, actually. And I think anyone who isn't a criminal and can support themselves should be largely allowed to do what they like, without fear of being beaten down if they don't do what authorities say is right. It doesn't particularly matter to me how legitimate the authorities believe they are - whether they've got a divine right of kings, or are blessed and anointed by the head of the church, or are elected through direct democracy, or representational democracy - maybe their governorship is more or less legitimate, but if they start saying, "We must do the greatest good, you must do this, you can't do that - in the name of good" I get very upset and believe that's wrong. I submit, because they're much much stronger than me, but it's with a mix of teeth gritted, sadness, and indignation. This isn't a right or wrong perspective per se, I just wanted to take a moment to share an alternate one with you. It's a little bit tangential from the investor discussion, but I think it's really important to think about.
I would suggest distributing the wealth equally among all is the best route to the greatest happiness, rather than giving most or all of it to one individual for whom it may not even be noticed.
I'm not sure, restricting freedoms of the innocent or demanding individuals work to benefit others at their own expense could create a net positive. The "badness" of that might be infinity.
If you look throughout history, it's never really worked out well to allow a rich minority to determine what happens to people and the land. Since time immemorial, a rich few have been abusing the property rights of others. Even America was founded by a rich minority who took the wealth of the land from the majority incumbents.
It's the same thing as always.
Unless I misread your initial message, you suggested that the government was not "taking" wealth from anyone, but rather it somehow had "surplus" wealth to be distributed. My question is more finely tuned to "where did this 'surplus' wealth come from, if it was not 'taken' from someone at some point?"
When the entrepreneur is booted out because (s)he was unable to generate $1M in revenue a year after 2 years in business, what happens to the business? Do the investors retain ownership? What legal rights does the entrepreneur have over the business (s)he created?
There are no laws in America protecting the rights of these entrepreneurs who are not citizens. They are here to build a business, hopefully, but if they miss the marks, they lose everything! Their home, their business, their employees, and potentially the rights to any revenues, IP, or equity in the company they founded. Do you think some rich investors who have the ability to have our nation's laws changed to their favor are going to stop taking money out of a business because its entrepreneur isn't allowed to live in the U.S. anymore? It'll be business as usual for them, with or without the entrepreneur who created the business.
This bill is good for no one but rich investors. It's definitely not good for entrepreneurship. Entrepreneurship has absolutely nothing to do with venture capital or investors or people with at least $10M in the bank. It's about creating businesses with the sweat off your back. If we are going to reward something -- reward that -- no strings attached!
Especially not strings attached to the fingers of the same rich folks who have caused so many problems in our nation already!
This is so horrible. What is happening to our country??
Where are you getting this from?
Non-residents can own things that happen to be in the US. They can sell them. They can even buy them.
Even if you're deported, there's no forfeiture.
Again - no, being deported doesn't cause any of those things. The owners of the biz are the ones who make that decison.
Since we're assuming that you're being deported because you're not satisfying the conditions of the startup visa, what are the odds that said owners would have kept you on anyway?
Advocates of the startup visa said that they wanted to bring folks into the company to create biz. Fair enough, but what should we conclude when they complain about deporting folks who don't do what they wanted?
And, what should we conclude when they make up stories about the consequences of deportation?
Yes, there have to be measurable metrics to gauge traction. Yes, I agree that 2 (3?) years is an acceptable time to create 5 jobs OR earn a mil OR raise a mil. Yes, unless those who don't meet these rules are deported, the rules won't have teeth.
But neither of those points has anything to do with the argument that deportation is synonymous with losing position, authority and likely control.
Maintaining control of a startup that is funded is a challenging job even when you are in the country. It should be. In my opinion, it would take a genius to remotely manage a startup. Even if you continue to be a majority owner after an investment, it would be very tough at best and foolish at worst to try to manage it from another country. That is assuming that it's a decision you alone can make, and your investors have no actual say in the matter.
The bottom line is that at the end of 2 (3?) years, if you don't meet these metrics, you will be in a different country than your company and very likely unable to control it without large scale changes in business model and/or structure.
Deportation is not syonymous with any of those things.
Those things are decided by the folks who control the biz. They're free to keep the person on after deportation. They're free to do those things even if the person isn't deported.
Yes, deportation may be a good reason for them to make certain decisions, but since they're free to ignore that reason, it isn't synonymous.
As to "nothing to do", the only reasons to discuss this are (1) if we let someone in on a startup visa, we shouldn't deport them if they fail, (2) folks who succeed on a startup visa might be deported, and (3) random cussedness.
Regardless, it's simply not true that being deported necessarily has the effects claimed.
entrepreneurs who fail to meet the bar are not being unfairly punished by investors, rich or otherwise.
these rqmts are simply the proposed bar for qualification. meet them, and you can stay. nothing more, nothing less.
this is a considerably better situation than what we have currently.
Look at http://travel.state.gov/visa/frvi/bulletin/bulletin_4659.htm.... It says that the US government is just now processing applicants who filed under EB-3 back in 2001 and 2002.
Put the "EB-6" people in the same line as the EB-3 people and the proposed legislation becomes a lot more fair, but useless. Speed up the EB-3 process and lots of people stuck working under a H1-B would quit their jobs and start their own businesses. The could do so with the money they've saved, or negotiate fair deals with investors.
I recommend everybody to read the proposed change to the law. It is a very small "patch" that is easy to read and understand, especially once you've read the rest of the discussion on this topic.
we can attack the problem by focusing on improving INS processing times, rather than excluding other valid applicants (of any type). we are certainly not suggesting StartupVisa green card applicants "move to the front of the line" ahead of anyone else, simply that their application be considered fairly & reasonably along with others.
Are you saying you'd have EB-6 applications also take 8.5 years?
furthermore, the job creation / economic output benefits don't need to wait for green card processing to be solved.
there's being practical, and then there's simply being defeatist.
i'd rather be part of trying to provide solutions to INS processing times than to wait on innovative solutions to job creation & immigration reform.
However, besides her, I've met others in similar or worse situations, stuck in the EB-3 queue. Even if my friend got her green card under EB-2, I'd still be advocating for the EB-3 workers.
Which, I must confess, appeals to me personally, but if we concede that we need the ability to legislate, then the simple potential for abuse can't be showstopper for any individual piece of legislation.
Rates and/or severity of abuse maybe, but not the simple possibility of it.
Why can't H1-B's do that right now? AFAIK there is nothing stopping them from moving to an EB6. I would.
I don't think that is an argument against speeding up EB-3. I think that should happen as well, but is obviously much harder politically.
I'm sure they will. However, rich people are such a minority that in 90%+ of cases this law will be used for its intended purpose.
Rich people can also "abuse" speeding and parking ticket laws(you can speed and park anywhere if you can afford the tickets), tax laws, etc. Just the way of the world. I wouldn't lose too much sleep over it.
Neither interpretation's fair to either of you, though.
(I have no horse in this race; living in Europe, the idea of a visa seems a bit anachronistic, really.)
Here's the different kinds for Sweden: http://www.migrationsverket.se/info/1074_en.html
In Germany the first permit that you get (an H1B equivalent) is tied to one job, and hence, tied to the place where you have that job. After 5 years of working full-time (and a long string of other checklist items), you're eligible to begin the application process for permanent residence (which I now have).
However you can still (with the permit to stay) move between UE countries, just get back to Italy and declare revenue (as entrepreneur).
I can understand why visas might seem obsolete from a European perspective, but from an American perspective regulation is a necessity. Per year we already accept the highest number of permanent residents in the world. In 2008 we naturalized a record number of people. And most importantly, per year we grant the highest number of people political asylum. These numbers, combined with the fact that unemployment in the US is the highest it's been since the early 1940s, makes accepting large number of immigrants impossible.
I'm not defending this bill or the current system; I know there are areas that need improvement. But fundamentally the US needs some sort of visa system.
This claim is specious: the high-end immigrants who are likely to start tech companies and earn PhDs are enormously employable and likely to employ others. If you want more employment, bring in people who are likely to make jobs; notice the high number of tech startups with founders who are immigrants or the children of immigrants.
Still, I doubt that these visas are going to have any noticeable impact on unemployment because the rate at which they'll be granted isn't going to be high enough.
As for immigration more generally, see James Fallows' comments here: http://www.theatlantic.com/doc/201001/american-decline . Allowing immigration is one of the relatively few things that America does right.
Heh, there are still people in EU countries (Romania, Bulgaria the least) that need visas to work in another EU country. So it's not all rosy within EU borders either.
That's what I mean; living in Europe you think about visas so rarely, despite crossing borders and looking at jobs overseas, that the whole idea begins to look archaic and paranoid.
I give you and startupvisa.com for actually taking a political issue to the point where one of the power-holding senators was willing to introduce legislation. And maybe if it comes to a vote while attached to the military funding bill or something it will pass! I don't think populists have enough power to speak out against the bill, so whether or not it passes probably comes down to random DC "inside baseball".
META: I ask that if you (anyone reading this) do not have something profoundly interesting to say that you not reply with any political discussion.
US immigration is so unbelievably messed up that there is little productive we can say. Like... there are actually networks of secret immigration prisons that lose people regularly. http://www.thenation.com/doc/20100104/stevens
Also see http://www.amnestyusa.org/uploads/JailedWithoutJustice.pdf but note that there is a much stronger political message.
Fixing the world one step at a time is not a bad approach.
Starting by steps that have great potential for generating wealth is a sensible strategy if you are thinking of taking any more steps.
META:
Lest someone else respond to me, I don't mean to imply that there aren't many more viable strategies for fixing the world! If you think you can save the world, I would prefer to discuss it with you via email rather than in this thread.
Only if you are on a low-priority employment-based visa and are Indian or Chinese born (i.e. waiting for priority date to become current). The process is still much too long though, even in other cases.
Not that I want to defend the US immigration and employment visa processes. Far from it. The system as it stands is completely and utterly broken. It turns away many of the very people the nation needs to keep its competitive edge in the world.
Realistically though, it will be quite some time before any politician will be willing - or even able - to show the kind of leadership that is necessary to tackle immigration issues, regardless of the merits of doing so.
To make visas available, we would amend immigration law to create a new EB-6 category for immigrant entrepreneurs. We would draw from existing visas under the EB-5 category. The EB-5 permits foreign nationals who invest at least $1 million in the U.S., and thereby create 10 jobs, to obtain a green card. In areas where unemployment is high, foreign nationals need only invest $500,000 to obtain residency. Though roughly 10,000 visas are annually allocated for the EB-5 category, less than half were used in FY 2009, so the addition of immigrant entrepreneurs should not present an unreasonable burden.
http://startupvisa.files.wordpress.com/2010/02/dc-startup-vi...
This merely branches a new visa off from EB-5, which is separate from, and has different intentions than, EB-3. EB-5 visas are not all being used up anymore, so both Senators are attempting to put those waisted EB-5's to good use. They imply that the proposed EB-6 visas "should not present an unreasonable burden" on the system.
if anything, prioritization is likely to work the other way: EB-1s first, then EB-2s, EB-3s, etc. see language below for EB-1 priority visa workers (with "extraordinary abilities"): http://en.wikipedia.org/wiki/EB-1_visa
note: i am not an immigration lawyer (IANA[I]L).
you may also wish to review language for the Immigration Act of 1990: http://en.wikipedia.org/wiki/Immigration_Act_of_1990
The question is what happens to those "extra" 9,000 visa numbers that are pre-reserved for EB-5. Everything I've been told says that whatever numbers aren't used by EB-5s gets "spilled over," starting at the top (EB-1), instead of going unused.
Also, I am not a lawyer either.
Not only do you have to get sponsored by an effectively arbitrary class of financiers (it is possible that Warren Buffet wouldn't qualify under these terms, depending on whether he has personally made 2 equity investments last year), but even if your company creates 10 US jobs and is cash-flow-positive, if you don't raise $1MM in capital or make $1MM in revenue, you're out.
I couldn't see anything that gave them the ability to otherwise control the status of the visa holders; but it's possible that I missed some nuance in the bill.
I think the goal is to prevent abuse of loopholes as much as possible - stopping corporations from becoming "investors" in order to circumvent the H1-B hiring caps.
I agree with you about the requirements for continuation being overly lofty though.
My personal thoughts are that it should be possible to start a company overseas, get far enough along to secure $250k in VC funding. Also, I would be surprised to find a successful startup that can't get $1m in revenue within 2 years.
While a VC can control additional investments, they have less control over revenue than most founders. A successful start-up should not be dependent on VC funding after 2 years unless it grows exponentially and needs the funds for growth.
Also the terms after 2 years are less than for an existing EB-5 visa.
(a) It wasn't easy.
(b) Before we beat that metric, we were still --- by virtually anyone on Hacker News' metrics --- a successful enterprise: growing, in control of our destiny, working on meaningful things, creating jobs.
The metrics in this bill are arbitrary (to put it charitably; there's an uncharitable interpretation too). A Thai entrepeneur who can create 5 viable US jobs should be granted a visa without an "angel investment". A Thai entrepreneur who can create viable jobs should be granted a visa without a postage stamp.
if the new visa class doesn't exist, these folks won't have jobs anyway. now you're claiming we should be worried their jobs might be taken away?
decide which part of the argument you wish to discuss.
So you could apply when you had $500K in revenues.
Also, I don't know for sure if the qualifying clauses for not being deported have an "and" relationship or an "or" relationship.
Do I need to raise a million dollars AND generate a million in revenue AND generate 5 jobs? Or is one of these enough?
Regardless, I'm not all that concerned about the 500k entrepreneurs.
I'm unclear on the "and" and "or" thing, too, but I think it's equally arbitrary to deport someone with 4 full-time employees for missing a $1MM mark, and I think 5 "full-time" employees is extremely gameable.
My interpretation is that you have 2 years to preform, and if you don't by the 3rd year - then you are deported, and not for missing the 2yr marks. You have 12 months of latitude if your heading in the right direction with employment.
I do agree that there is going to be some gaming of the system.
That's what strikes me. What kind of employee do they need to be? If I employ 5 full time janitors on minimum wage do I get to stay?
if you create 5 US jobs, you get to stay.
if you don't create 5 US jobs, but can generate EITHER $1M in revenue (at break-even or better), OR raise $1M in additional capital from ANY qualifying investor (doesn't have to be the original one), you get to stay.
please read the language carefully -- it does cover the situation adequately.
we did take quite a bit of time to consider the exact language, and worked hard to get it to be functional.
False.
"To make visas available, we would amend immigration law to create a new EB-6 category for immigrant entrepreneurs. We would draw from existing visas under the EB-5 category. The EB-5 permits foreign nationals who invest at $1 million in the U.S., and thereby creates 10 jobs, to obtain a green card. In areas where unemployment is high, foreign nationals only need to invest $500,000 to obtain residency. Though roughly 10,000 visas are annually allocated for the EB-5 category, less than half were used in FY 2009, so the addition of immigrant entrepreneurs should not present an unreasonable burden."
Green card is permanent residency - once they've got it, they've got it. This looks pretty awesome.
http://startupvisa.files.wordpress.com/2010/02/dc-startup-vi...
It was a pdf and I coudln't figure out how to highlight so I retyped it myself - apologies if there's a minor grammar/spelling error.
‘‘(3) SPONSORED ENTREPRENEURS.—The Sec- retary of Homeland Security shall terminate the per- manent resident status of a sponsored entrepreneur and the alien spouse and children of such entre- preneur if the Secretary determines, not later than 3 years after the date on which such permanent resi- dent status was conferred, that—
‘‘(A) the qualified venture capitalist or qualified super angel investor who sponsored the entrepreneur failed to meet the investment requirements under section 203(b)(6)(A)(i); or
‘‘(B) the entrepreneur failed to meet the job creation, capital investment, or revenue gen- eration requirements under section 203(b)(6)(A)(ii).’’;
The job creation, capital investment, and revenue generation requirements (by the way, this language is ambiguous, with the "or" being more restrictive here and less restrictive earlier in the bill) are:
‘‘(I) create not fewer than 5 new full-time jobs in the United States employing people other than the im- migrant’s spouse, sons, or daughters;
‘‘(II) raise not less than $1,000,000 in capital investment in furtherance of a commercial entity based in the United States; or
‘‘(III) generate not less than $1,000,000 in revenue.
You know more about immigration law than I do. All I can do is read. Tell me what I'm misinterpreting.
The VC funders have less significantly less control than a employer of a H-1B visa.
Basically they are saying you have a 2 years (max 3 years) to meet the requirements (investment and jobs)of the visa, or go home. A EB-5 visa has a 2 year "conditional status" along similar lines.
A H-1B visa, the employer can terminate your job, and you have 30 days to leave the country. A VC can't do that unless the founders have given up their controlling interest.
My question is, is there some other law or propose legislation that mitigates the impact of this bill? If there is, I'll stand corrected.
From the legislation you quoted;
"‘‘(II) raise not less than $1,000,000 in capital investment in furtherance of a commercial entity based in the United States; or ‘‘(III) generate not less than $1,000,000 in revenue."
Note that it says OR
The gist is irrelevant. The only thing that is relevant is what it actually says.
Edit: he said it explicitly here - http://news.ycombinator.com/item?id=1148789
No, it's not perfect, but what alternative do you propose?
feel free to contribute to other efforts to promote your ideas. however, hope you don't feel the need to tear down our (complementary) ones that may be achieved practically & expediently.
light a candle, don't piss on ours.
if you must make it zero-sum, then i'm quite willing to face the music in the senate.
so be it: have at thee, gauntlet thrown.
Thomas says that there certainly will be companies who will be forced to raise a arbitrary amounts of money at an arbitrary time (in both cases, I mean "arbitrary" in relation to their business), even when they're otherwise doing well. On top of that, the VCs negotiating that round will know that their investment is what determines the fate of the company.
Dave points out that this is the best solution which is politically viable.
Both seem true, in my opinion. Still, and with all due respect, Dave's bio does say he "invests in startups if they let him" (emphasis mine). This law will create a class of startups that are forced to look for investment at a stage that may have make business sense, with the only strategy at a "fair" valuation being to play off investors against each other. This is certainly in the interests of people who invest in startups.
I wonder if bundling the interests of "those who can afford to lobby" into laws is the only way to get laws passed in the US nowadays.
Hey mate, did you edit that into your comment or did I just miss it the first time? Because I upvoted you since I agree with the not mutual exclusive/harder to pull off thing, but no need to be crass like that. It doesn't help further the position we generally agree on, and clouds the discussion. tpt is a smart and good commentor anyways, even though we disagree some times - it's totally unnecessary to be crass with him like that.
really, you must not read my blog.
i'm being incredibly civil in this discussion compared to my usual white-trash, immature, profane and loutish self.
If we look at H1-B situation, what makes employers abuse it and almost makes H1-B holders useless (for anything other than their current employment) is the tie visa has with the employer. If we make H1-B holders move around freely between jobs then there is less room for abuse. IMHO.
This only affects immigrants with permanent residency status who have been sponsored through this bill/law. You stated:
"This is a bill that proposes to give US venture capitalists the overt ability to terminate the residency status of founders and their families."
True in the sense that if the sponsored entrepreneur was unable to fulfill the job creation, capital investment, and revenue generation terms, then they technically were unable to create a successful enterprise. Any foreign 'entrepreneur' worth his salt should and must know of this requirement and in the awareness of it, must have prepared himself and his family for the consequences.
As for part (A) "...the qualified venture capitalist or qualified super angel investor who sponsored the entrepreneur failed to meet the investment requirements..."
I think this refers to the initial requirements that needed to have been met before the foreign entrepreneur is approved for residency. It could be that the VC committed to the investment (That IS a bitambiguous, but from experience, immigration officials will approve an application and give you a chance to fulfill a financial commitment some time after the sponsored entrepreneur has arrived, provided they are satisfied with whatever guarantee docs you've filed with them.) but was unable to fulfill it, so Homeland Security will start the process of terminating the permanent residency status of the sponsored entrepreneur.
Can this be twisted around by an 'evil' VC? I believe any system CAN be abused around given enough motivation. In this case, if I were an evil VC who convinced Mr. Chatroulette founder from Russia to come to America to blow his idea up 1000x through me, I'd bring him in, dupe him into signing his life away in a 'partnership', promise Homeland Security that I will fulfill my financial commitments, squeeze everything I can from this naive new sponsored entrepreneur in the 6mos-1yr that Homeland Security will take to enforce my commitment, then not pay up. Back to Russia goes 'sponsored entrepreneur' and his concept/resources stay here in the US.
Bottom line for all parties, due diligence. I believe the bill is being put forward in good faith. I believe that they believe it can create jobs. I believe that it is possible it can.
But all things considered, I'd rather concentrate resources on finding the cream of the crop in the US and helping THEM.
But their intentions don't matter at all. What matters is the law that the bill will create. And, as I read it, the law that this bill creates will have unintended negative consequences both for immigration and entrepreneurship.
Your last sentence? I absolutely, 100% agree.
altho the legislation as proposed is not final, it was clearly drafted and stated with each of the 3 potential rqmts being sufficient on their own, not together.
i think you lose your side of the argument by arguing for any arbitrary amount. i'm happy to argue the merits of what the correct # is, but regardless i think we're just splitting hairs at that point... i've won the discussion.
besides, it's a rather ridiculous amount of hassle in both time & money to raise capital from experienced investors in exchange for hatching some supposedly nefarious scheme to -- wait for it -- hire some low-wage workers.
really, while i fully admit there may be gaming of the system attempted, this supposed workaround is quite a stretch -- it requires the participation of sophisticated investors willing to risk substantial amounts of capital, reputation, effort, and criminal penalty in order to execute.
this doesn't appear to be a rational point worth arguing, you're just being contrarian for the hell of it.
the rest of your argument is perhaps interesting from a theoretical standpoint, but not likely very relevant from a practical perspective.
it's very simple: create 5 full-time jobs in the US in 2 years time, and you get to stay. if you can't do that, at least get to break-even on $1M in revenue. if you can't do THAT, then find an investor willing to back you for another $1M every 2 years.
the rqmts are quite lenient and reasonable. the fate of the entrepreneur is very much in their own hands (& heads).
I'm not saying that's a problem, but it certainly makes the requirement easier to satisfy. A full time minimum wage job including taxes is just about $20k a year.
while it's possible, it's not very likely.
we did not draft legislation to cover all possible edge cases, but rather to reasonably address common scenarios.
obviously we've let you into HN comments, & you're doing the equivalent of not wearing any intellectual pants... ;)
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why are you quoting "sponsor"? why use "clique"? you're just trying to use specific questionable punctuation to indict a broad group of people w/o any real analysis of why their motives or ethics are in question.
job creation is likely to be a good thing. if you have specific solutions / suggestions on better ways to measure job creation effectiveness, please state them.
again, happy to argue about these topics rather than you simply ripping on the general proposal. at least we can get to constructive criticism, rather than whether you or anyone else aren't wearing pants.
Please stop taking this so personally. I'm not. How could I? I have no idea who you are.
that said, when you cast disparaging comments on the entire class of VCs not treating entrepreneurs well, it's hard not to take it a little personal (altho i've been on both sides).
when you're stereotyping, it does hit home a little harder.
I'm looking into emigrating, but I guess the US still has too-steep requirements for it to be a country to immigrate to.
But we're trying.
How's this:
Group 1) We feel immigration hurts us economically and are generally opposed regardless of specifics (50% liberal, 50% conservative)
Group 2) We feel immigration hurts us culturally and are generally opposed regardless of specifics (95% conservative)
The legislation proposed moves us from "no way, no how" to "imperfect system" -- if you're primarily for relaxing immigration policies for professionals, you should support the bill in principle, favor it over nothing, and probably have quibbles. This bill would mean more professional immigration for the purpose of starting companies -- along with the requisite amount of BS, hassle, unfair playing field etc that apply to all visa situations as things stand now.
You're doing your argument a disservice by engaging with personalities (rightly or, here, wrongly) instead of ideas.
This isn't a personal criticism, because I demonstrably don't occupy the high ground on this point on HN. But you may want to be aware of it.
It seems that we share the goal of increased immigration of professionals and enabling them to succeed in america, shared prosperity and all of that..
This bill, to me, is incremental progress towards that goal but flawed on some specifics.. do you agree?
Is your opposition a case of "not good enough and hold out for better"? The specifics about VCs controlling the visa are the deal-breaker for you? How is that so much worse than H-1B where the employer controls the visa?
Honest questions, I really don't understand the argument.
The first is giving venture capitalists this role in public policy.
The second is carving out visas for a form of entrepreneurship modeled on VC-funded tech startups.
If a business creates jobs, I don't see how it's relevant to public policy that it hits a $1MM revenue threshold or (even more weirdly) a $1MM capital investment requirement.
regardless, it's also not the case that all other backlogged visas are of higher priority than new visas. if there is a zero-sum game to be played, priorities could well be reviewed for all types of visas.
your argument for not approving this legislation seems to revolved solely around the backlog issue. there are other better ways to solve that problem than by simply stonewalling all other visa legislation.
Why not just say.
As long as you can pay for your self and your family in the US you are welcome to stay.
If you can't same rule as any other H1 H1B etc applies.
Out of sponsor, out of the US.
US employers already have this power over employees that hold visas. Why do you trust employers but not VCs? (Or put another one, there is potential for abuse in either arrangement, but I'm not convinced that VCs are fundamentally worse than employers.)
Adding yet another class of people with unfair power over immigrants, and yet another distortion to the market, seems like a very poor response to that problem.
Perhaps not -- but if we're debating a realistic change to the visa system, an argument that begins with rejecting the basic principle under which most visas operate seems pretty impractical.
Adding yet another class of people with unfair power over immigrants, and yet another distortion to the market, seems like a very poor response to that problem.
According to what standard would this give VCs "unfair" power over immigrants?
As for "distorting the market", any substantial change to the visa system would distort the market in one way or another. The practical question is whether the startup visa improves the situation, not whether it is the globally optimal immigration policy.
1) people who want to "buy a VISA" (aka have the money to invest in a new business already) wouldn't need any new legislation. the existing EB-5 handles this.
2) VCs have no specific control over entrepreneurs ability to qualify / remain in the US, however the entrepreneur is initially required to get at least one sponsoring US entity (VC or qualifying angel) to support the application and invest at least $100K. for renewal, they would have to qualify either by reaching profitability at a $1M revenue run rate, creating a minimum of 5 US jobs, or achieving a subsequent round of financing of at least $1M. True there are a few edge cases which might not qualify, however we're doing the best we can to draft legislation which is reasonable in most cases. (creating 5 US jobs in 2 years is a fairly low bar, which should be substantially easier than getting to break-even on at least $1M revenue, or raising subsequent capital).
3) it is not my understanding that creation of this new class will put substantial hardship on processing other types of visas, altho obviously the cost in time & resources is non-zero. that said, since most of the rqmts for the application process in this new visa class are market-based, not based on bureaucratic review, we expect to have a faster processing time than for other types of visas (and hopefully would not slow down existing visa processing much if at all).
for more info, please see http://StartupVisa.com
I think the big issue most people on here are having, is the fact that if you fail to either create 5 jobs or revenue of $1MM or a larger VC round, you get kicked back to your own country despite having invested 2 years and all the effort that comes with planting your roots in a completely new country.
It is hard to understand this if you've (and I'm not calling you out) never switched countries but the older you get the harder it becomes to simply pick up and move and since you are at the mercy of either the VCs in raising a new round or the market in creating a sustainable entity it becomes less attractive as an immigration option. What if you do create 5 jobs and then tank in a year? Even if you have a million users?
An easier solution would be to give everyone with a successful track record of being an upstanding citizen (paid taxes, earned > $xxx amount, has a professional qualification) immediate permanent residency exactly like the UK and Canada and not tie it to metrics that are hard to measure and achieve in a short amount of time.
this is not a handout, it's a hand up. we expect people to innovate, create jobs, and create positive economic results.
we're trying to help those who are willing to help themselves. and yes, those entrepreneurs who are more capable -- that is, can run a business profitably at some scale, and can create a minimum # of jobs -- will have a better shot than others.
there is nothing unfair or unethical about trying to help those entrepreneurs who are willing to do the work necessary to make it happen.
And a poor law player too ;-) With unemployment set to remain pretty high over the next several years, employing a few minimum wage "office managers" to make up the numbers (assuming you get the extra funding or do the >$1M revenue) isn't going to cost very much.
The question is what happens when you fail. Obviously, if you have 100-250k, you can hire 2 people. But then what happens if the biz fails? You created 2 (probably more jobs) and now you're going to get kicked back to your own country? Or am I mis-reading this, and as soon as you hire 2 people you get your green card?
(that is: you can always start another business, pitch new investors for funding, and re-qualify for the new business. there is no restriction on multiple attempts, however you will have to convince investors you're worth a 2nd chance... or 3rd... or 4th... etc)
What you propose is an easier solution for prospective immigrants, but much more difficult politically.
WHY should non-US entrepreneurs need to come to the States to start businesses? Just because the US VC's are too lazy to take their money overseas?
Well, that really depends on what market you enter, doesn't it? :)
WHY should non-US entrepreneurs need to come to the States to start businesses?
From the perspective of the US, that should be obvious: because the new jobs would be created in the US rather than the entrepreneur's home country.
From the entrepreneur's perspective, that's a much better question, and the answer will vary from case to case.
that said, it could be argued there is some priority for immigrants who are helping to create jobs over those who are not. i'm not suggesting that position be used to set priorities in allocating visas, but it's not necessarily unfair that the backlog of some group visas has higher or lower priority than others.
it seems that you have a particular issue with your friend's visa being in backlog and not being approved, and that this is coloring your perspective on all other types of visas.
while i have sympathy for your situation, this is not a rational perspective from which to make an argument for prioritization of visas, imho.
Also, I think you didn't consider the backlog problem with EB-6. If EB-6 was added, lots of people would immediately begin the process of becoming qualified investors, and lots of EB-3 workers would start the EB-6 process. Then the EB-6s would get exhausted very quickly and a backlog would start, even if they were given a queue separate from EB-3. That is exactly because EB-6 would be so much easier than EB-1, EB-2, and EB-5 to qualify for.
Even if my friend's EB-3 petition wasn't backlogged, I would still object to the idea that rich investors can hand-pick immigrants that they think will make them money, and practically just hand them permanent residency. If you were advocating a new temporary visa program for these people I'd be a lot more supportive of it. But, they don't deserve permanent residency more than the people already waiting in the various lines.
you're in your rights to have a different opinion, but it's not an unreasonable position to argue. you act as if that's unethical, but it's more based on job creation in the US than for VCs to get rich. (there are plenty of other ways for VCs to get rich, and this isn't some nefarious angle we're pushing )
I think this is much better than an H1-B. In many ways, you have more control over your fate as an entrepreneur than as an employee - I've seen mentions of entrepreneurial servitude, but working for a company on a H1-B seems like a much more precarious position. In addition, with this proposed visa there are clear targets to hit - you know what you're getting into upfront.
Talking about rich people bringing their friends into the country... as far as I understand it, it sounds like EB-5 is still much better suited for that. Pay $500,000 to start a business somewhere in rural America, and you're done - no strings attached, no work required (the business doesn't even have to be successful, unlike this proposal).
We might have a serious illegal immigration problem in this country, but admitting skilled immigrants is certainly something we should want to encourage.
however, our proposed legislation simply focuses on making visas available to people who can help 1) create jobs, 2) create innovation, and 3) create economic output.
the two are not mutually exclusive, and are likely even complementary. however, this does not mean they have to be merged, and they can be worked on indepedently.
(that said, it is likely all such legislation will be considered in a comprehensive immigration bill supported by the left & the right sometime this year... we hope :)
If they want a way to really bring skilled people into the US, they could start by heavily revising or completely doing away with the execrable immigration quota system: http://www.immigralaw.com/english/immigrationquotas.html
If that is not true, then entrepreneurs should be allowed into the country whether or not they've invested $500k into a business. What if you've invested 3 years into a business or 10 years? Why not let those people in too? They create jobs.
This bill is absurd. It's classist. It's contrary to the American dream where hard work and accomplishment is the ticket to wealth, not a check for $500,000.
Why don't we just remove the veil and call it what it is, "The Rich Man's Visa".
The bill that's just been introduced doesn't require the entrepreneur to do anything except start a business and be funded. After 2 years they either have to garner more funding or have over $1,000,000 in revenues.
I'm more than a little confused as to how you see this as being "the rich man's visa", especially in light of the fact that the existing EB-5 program fits that nickname much more accurately.
Fundamentally US immigration needs reform to a points-based system. But this is a relatively quick and simple tweak that would create a lot of jobs.
Now I am not a lawyer, so I would really like to know if it is "and" or "or", but I don't see where it requires the entrepreneur to be rich.
Am I misunderstanding the text?
If someone wants to come to the U.S. and try to create a business and has it all lined out -- let them come! Don't make them get approval from someone with lots of money.
Has, what all lined out? There in lies the rub. If you let anyone who declares he is an entrepreneur in, the law will be a joke. Naturally, you have to have some firm qualifiers. As long as it is 5 jobs OR a million dollars in revenue OR investment and you have 2 (or 3) years to do it, I don't understand why that is unfair. 2 years is a lot of time to create 5 jobs. It's not an easy goal, but it's doable.
I say this as someone who intends to go the EB6 route if this passes.
In this case, I am creating a business whose customers are in the U.S. And so, so am I. Just on a much slower route to permanent residency.
Were I not already in the U.S., other reasons for me to go the EB6 route rather than do business there could be
(1)If it is much much much harder to get VC in my home country
(2) If the kind of business I want to start can only be done in the U.S.
raising capital, creating jobs, or making revenue are very OB-jective metrics, and are much less easily abused or compromised (read: determined easily by provable data, likely to not be interfered with or misinterpreted by bureaucrats, and likely to streamline / reduce processing times).
in other words, market data & stats are provable & will likely speed up the process.
there is nothing quite so unfair or undemocratic as an INS official who has had a bad day, is misinformed, or is behind on paperwork -- or heaven forbid all of the above.
we hope to avoid this situation by making the Startup Visa rqmts very easily objective & provable based on verifiable data.
I really really hope we get a profile of the people and companies that get started if this bill passes.
To do what Max was talking about would only require $200K to get in the door, and the willingness of an accredited investor to commit fraud.
there are obvious penalties which would be incurred if someone intentionally abused this system.
legislation does not prevent all types of abuse, however we have attempted to reasonably make it unlikely that such abuse would not occur without great cost and risk to the perpetrators.
we believe we have done a responsible job in drafting the legislation to avoid this. exact language will depend on how the bill gets negotiated before final vote.
I think it should say at least 2 investments, and at least $100k in total value of the investments.
This just doesn't seem well thought out.
yes, it's likely not all investors will qualify -- not perfect, but it's reasonable to require some domain experience that can be provably audited. and yes, the investors who do qualify will likely not be completely sketchy and/or likely to commit fraud.
we picked a reasonable bar to get over that straddles both a rqmt of experience and some capital without making it so low that people could abuse it.
investing $300,000 in capital in 6 companies over 3 years does NOT seem like "virtually anyone" for "very little money".
your perspective again seems irrational & extreme.
If you don't want to continue arguing, stop arguing. I don't care what bar you picked for investors, except for the fact that it seems obvious that it's modelled on the tech investor clique. If you got the investor model perfect, I'd still have a problem with conflating investment with viability or value to the economy.
I don't believe for one millisecond that you will concede anything about this bill, which you clearly passionately support. That doesn't bother me at all, for what it's worth.
if you want to have a discussion where we have the chance to change each others' minds, then perhaps we should be talking about what parts of investor mentality are in question, and why that isn't better than doing nothing / status quo.
I am a US resident based out of India and mentor a few students. I do talk a lot of PG and recently one of my students asked me as to why YCombinator would not come down to India to organize a camp and find worthy ideas deserving funding. These are students who, in the current scenario, need to first head over to US on a student or work visa, and then apply for YC funding. By the time they do that, most of them would have missed out a few precious years from the age PG writes about as the golden age for taking risks (and I agree).
This visa opens up those doors. Yes, it can be misused, but if a little use comes out of it and benefit the world, that is good enough.
US is losing out to India and China with respect to having a whole new generation being highly educated. This visa is a great measure to continue to attract talent from world over.
Edit: I answered my own question, startupvisa.com is the group that did the lobbying. http://startupvisa.com/about/
Startup visa is a move in the right direction - it adds another viable path to permanent residency. A path other than joining a big company and relying on them for example.
IANAL so I could be wrong.
In countries like India, it can take several years to get simple demands of the people into law. Most politicians there are incredibly self-interested and care little about the people. (I'm not saying US politicians are not self-interested, but at least they listen to their people.
If only the governments of India and other countries in similar situations began listening to their people's demands.. then these countries would be so much better off.
1) This hasn't passed yet. Let's see what happens, the US government is a bit deadlocked right now.
2) I'm not convinced this happens very often. Maybe I'm wrong.
3) I can't help but notice that the demand comes from VCs and investors - people who control large sums of money - rather than "citizens" or "people" in the broader sense.
re: 3 -- um, "investors are people too". actually, what you should notice is that the "demand" came from people who were concerned enough to take action, and try and get something to happen.
i can't disagree that it helps to have people on your side who can help with dollars and connections, but the more important point is that people cared enough to spend time & energy to make change.
with a little luck, we might get it all the way across the finish line.
Don't get me wrong - I definitely appreciate what you guys are doing. I'll probably be first in line to apply if this passes, so thank you, and best of luck!
It's just not possible for the US government to fix things in a revolutionary fashion, but every little (very little) step forward is still a good thing.
Who would have thought...John Kerry is the latest Wizard in the "Lord of the Visa."
I have no idea what Lugar's motives are here, only that getting primaried out or losing to a Democrat in Indiana is not even on his radar screen. (yes, Evan Bayh is from Indiania, but there are no other popular former Democratic governors ready to come out of the woodwork to run against Lugar)
No way.