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Comment by jasode | Hacker News Reader

>The rules of this startup visa never made any sense.

Can you elaborate specifically on the rules of the USA startup visa that didn't make sense? For comparison and discussion, you can look at other countries' startup visa programs [1] like Germany, New Zealand, Sweden, etc.

Basically, the idea is to craft the visa rules such that the barriers are high enough that it allows legitimate foreign entrepreneurs with real business prospects to filter through. On the other hand, if you make the criteria "too easy", it becomes a "back door visa" for non-productive foreigners to abuse.

It's a balance between those two outcomes. Did any other country tune their visa policy correctly? If so, what did USA specifically get wrong and what did the other countries get right?

[1] http://www.migrationpolicy.org/article/visas-entrepreneurs-h...

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> Can you elaborate specifically on the rules of the USA startup visa that didn't make sense?

As someone pointed out a couple weeks ago [1]:

> From the article:

> "To qualify for the rule, entrepreneurs would have to meet high standards. A foreigner must demonstrate that he or she will contribute to economic growth or job creation and show that a reputable investor has put at least $250,000 into the company. Under this rule, they can stay in the U.S. for 30 months, with the possibility of a 30-month extension. They cannot apply for a green card during this period."

> This sounds like a pretty lame visa. How are you supposed to build a startup if you only have 30 months to do so? Why would investors risk $250k if the founder may be deported in 30 months? What happens after the extension period?

So from your link, that startup rule got wrong the 'Defining Success: Criteria for Permanent Residence' which states:

> Conditional entrepreneur visas can typically be renewed or converted to permanent residence after two to four years if the immigrant creates a successful business. (An exception is the Australian Venture Capital Entrepreneur program, which provides immediate permanent residence.)

But here the rule is simply: 'They cannot apply for a green card during this period.'. So even if your startup is successful, you're kicked out after 2.5 or 5 years.

[1] https://news.ycombinator.com/item?id=14606478

This visa program deserves to be repealed. This is a big contrast to a couple of years ago when you could bring in 200k+ in to the country and start a business. Australia and Canada would grant a permanent residency.

I know everyone likes blaming Trump for everything but i’m happy when they decide to reform immigration programs that don’t make sense.

I'm not familiar with other countries entrepreneurship visas.

This rule originally required $345,000 in investment from US based investors before the visa is awarded. The amount was then revised down to $250k after comments from the executive and investor community. It then required $500k in recurring revenue and 20% annualized revenue growth in order to extend the visa after 2 years.

I'm not sure why a foreign startup founder with a product that raised $250k from US investors and can confidently say they will have $500k in revenue want to temporarily immigrate to the US? Nothing is stopping them from operating in the US and there are existing visas for business owners operating in the US they can use that don't have all of the related hoops.

I think ultimately this would be underutilized at best and gamed much like the EB5 program at worst.

I believe it was an additional $500k of funding to renew, which is a notable difference.

>I'm not sure why a foreign startup founder [...] want to temporarily immigrate to the US?

To make sure I'm not misinterpreting that, you're saying startup founders would rather run their startup company remotely thousands of miles away? E.g. the foreign startup founder stays in France which is 6+ time zones away while his company and employees are working in the USA? To be clear, we're not talking about the mother ship of a mature company opening a branch office in another country but instead, an infant startup company with maybe the founder and 1 or 2 other people. Even if the majority of startup founders wanted that arrangement, what VCs would invest in that type of working structure?

>Nothing is stopping them from operating in the US and there are existing visas for business owners operating in the US they can use that don't have all of the related hoops.

If you look at the other USA visa options[1], they are not exactly redundant with the proposed startup visa. (E.g. EB5 requires higher amount of $1 million from the immigrant which basically means the immigrant is already wealthy instead of starving entrepreneur with no money. The other visas are based on talent/skill such as advanced hard-to-find PhD or require employers to sponsor. The immigrant is his own employer.)

[1] http://fundersandfounders.com/coming-to-america-for-entrepre...

I think you and I have a different view of the type of entrepreneur this visa would apply to.

I don't think a foreign startup with 1 or 2 employees is going to attract $250k investment from US investors. (source: I once started a tech company in south america, US investors rarely invested outside of the US in early stage businesses) I think this would just be too risky for the US investor.

On the other hand if there was a startup that were within 2 years reach of $500k recurring revenue and 20% growth and were derisked to the point that US investors were interested in putting up real money then they are probably established enough that they wouldn't want to make the move for such a short time frame.

I think when people first read about this visa rule they imagined it'd be more ycombinator hacker types ("infant startup company with maybe the founder and 1 or 2 other people") when in reality that wasn't the case.

I wish I could remember where I saw the video (a guy with a bunch of gumballs representing population), but I remember he spoke about how the visa process is really beneficial for the USA but bad for other countries. The point being that we drain their talent pool while increasing our own.

The argument being that as we skim the top people from the talent pool of other countries we reduce their capability to push innovation and ideas within their own infrastructure. Instead the USA benefits in that we don't have to have the smartest people just the most attractive place for them to come and help our country. So while I disagree with his message behind this move, I think he inadvertently helped the rest of the world...

https://www.youtube.com/watch?v=LPjzfGChGlE

That's only tangentially involved in this discussion though. That video is about whether opening immigration pathways to the USA can reduce world poverty. I never reviewed the rules that are being overturned here, so I can't say whether they made sense or not, but they were probably targeted at increasing US economic growth, not reducing world poverty.

Pretty much. 40% of Fortune 500 companies were founded by immigrant families. Likewise, 7 of the top 10 brands in the world were founded by U.S. immigrants or their children.

https://www.forbes.com/sites/stuartanderson/2011/06/19/40-pe...

Of course 40% of businesses were stared by immigrants. America is the land of immigrants. The articles states since 1850. Even the Trump families subsequent good fortunes were made possible by an immigrant.

Most of my friends and extended families have a grand parent or two who were immigrants. If not grand parent then great grand parent.

If you read the article, you'd see the criteria for which they describe it as being either an immigrant (18% of Fortune 500 founders) or the child of an immigrant (22% of Fortune 500 founders).

Grandchildren are not included, hence Donald Trump doesn't qualify.

It's that, or 60% of Fortune 500 companies were started by native americans.

True, but on the other hand, if 5 people found a company, and one of them is an immigrant or the child of an immigrant, that counts as an immigrant founded company, even if the company would have been founded without that one person.

The reason I quoted grand parents is because a good amount of Fortune 500s were created in the 1900s. That would be my parents to grandparents generations not millenials.

Fortune 500 companies founded since 1985 are more likely to be founded by immigrants (20%) than companies founded before 1985 (17%). This isn't about your grandparents.

The definition of immigrant founder, as others have pointed out, is an immigrant or a child of an immigrant. I wasn't born in 1985 so it is almost as much about my grand parents (17%) as it is about me (20%).

My definition of immigrant is not a child of an immigrant.

Fortune 500 companies founded in the last 25 years are more likely to be founded by immigrants. Not immigrants and their children - just immigrants.

Regardless of your play on semantics, you're still wrong about your grandparents.

I was a big fan of a lot of US brands putting up subtle (or not-so-subtle) pro-immigrant Superbowl ads.

F.ex. Budweiser: https://m.youtube.com/watch?v=HtBZvl7dIu4

How many of those immigrants were sponsored by a corporation or investor and restricted in how and where they could work by the terms of their employment?

How many came here as free and full members of the workforce, allowed to pursue their own career paths as they saw fit?

There's a huge difference between supporting immigration and employer controlled visa programs.

The newest fortune 500 companies (founded last 25 years) are more likely to have an immigrant founder. Corporate sponsorship (H1B, etc.) was part of the Immigration Act of 1965, meaning that even in lieu of more restrictive immigration, immigrants are still heavy hitters for generating jobs and revenue.

It is worth noting that productivity and innovation are a team sport.

If you place a single bitcoin programmer in the middle of, say, Yemen, that person would be a lot less productive than they would in the US.

This might be marginally improved with the internet (at least the person doesn't have to physically ask questions or purchase books), but only marginally.

Consider:

1. Tough time understanding the needs of paying business customers because the business are smaller and less tech savvy.

2. Tough time hiring other workers to expand because they are fewer schools that produce programmers, managers etc.

3. Tough time with internet, electricity and so forth because the infrastructure isn't there.

4. Tough time with knowing what the legal hoops are for setting up a company and a contract because the institutions have been weakened.

And so on.

Of course there are smart and innovative people there who can do useful work in that context. But that is not the same as the US context.

Isn't the response that for those businesses to grow, for those schools to produce more programmers, to build out the infrastructure, the top performers who are motivated to solve or improve such problems must stay in their country to work on them? If they go elsewhere, then elsewhere gets better solutions but their home doesn't.

/Until we learn to package the solution in a nice development kit and resale it back to their homeland at a nice markup.

I doubt that is accurate. Generally speaking, most places which are hostile to new business ideas aren't going to become less hostile if they retain more of "their" smart people, because the problems are not things that can be easily solved by simply having smart people around.

I mean, if smart people stay in Russia instead of move to the US, is that going to change that rampant corruption and government control make it hard to run a legitimate business in Russia? If smart people stay in China instead of move to the US, does that mean that the oppression that the Chinese Communist Party engages in is going to go away through magic? If smart people stay in Greece instead of move to America, is that going to solve their sovereign debt problems? If smart people stay in Venezuela, how will they solve the problem of there not being enough food to eat?

Those are all examples off of the top of my head. I'm certain less dramatic ones can be easily conjured up for any country where someone may decide to choose USA to start up.

Maybe! After all, those "smart people" may turn to solving or changing the underlying limiting economic or business issues. Either as a focus of their efforts or by necessity of running a business. Or by contributing to innovation in more "traditional" channels.

On the other side of it, why would these "smart people" want to bother helping their homeland versus helping them and theirs?

Maybe it's worse for those countries, but in a world of globalisation, it's not irrational to pursue the opportunities in a place where you can get the most bang for your buck. You can always return if you want to, but that's not the path of least resistance.

For the context of this comment, this is if these "smart people" couldn't come to the U.S. instead. ("The argument being that as we skim the top people from the talent pool of other countries we reduce their capability to push innovation and ideas within their own infrastructure.")

Basically, if these "smart people" couldn't come to the U.S., there would be no option. They wouldn't have any where else to go, and would have to help their homeland in order to help them and theirs. No other option if they couldn't come to the U.S. instead (if the theory is correct).

>If smart people stay in Greece instead of move to America, is that going to solve their sovereign debt problems?

Yes, Greece would be closer to solving their financial situation if there were smart people in Greece. What kind of question is that?

Really? Please explain how having more smart people would fix the problem there.

I don't think they have a shortage of high IQ people in Greece. They seem to have a shortage of money to spend, and a culture that is hostile to spending less money because of trust issues within their society. How do you throw smart people at that problem to make it go away?

So you agree, we don't need visas.

No, I said that more smart people would not fix the problems with Greek society that make starting businesses there vs. USA unpleasant. That doesn't say anything about whether or not "we need visas."

It's called Brain Drain.

It's pretty obviously easy to game. Similar programs currently in place are basically funnels for rich foreigners from China and other countries to get green cards for doing marginally productive things like buying commercial property.

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