The Founder Visa
paulgraham.com
paulgraham.com
This part scares me. Accreditation boards are a bug, not a feature. Perhaps, like pg's idea, they started out as well intentioned. But today, their primary purpose is to erect arbitrary barriers of entries, thus propping of the salaries of professionals and the tuition of the schools. The tech industry is great because it is so isolated from politics and bureaucracy. I'd hate for that to change.
This is a good idea because the expected outcome of adding 10,000 new people to the "pool of workers" by existing companies would be to see an increase in unemployment claims (even though not all unemployed people would file).
So by adding 10,000 Founder Visas to the pool of workers and then tracking the rate of decrease (or increase) of unemployment, a metric of immigrant-based job-creation startup foo could probably be determined.
In politics, the organized faction always trumps the general interest. Say Faction A is 1% of the population. The faction wants to preserve a barrier to entry that costs every voter $100 and nets each faction member $10,000. The members of Faction A will be single issue voters over the barrier to entry. But to the rest of the public, the issue is lost in the noise. Average Joe does not even realize how much the barrier to entry costs him, because no interest group will fund ads to tell him. Thus the politician always supports the faction in order to prevent the 2% swing. ( I've spent time in both the state house and Congress, and this is exactly how the decision making process works).
The life cycle of any government policy ends up being the following: 1) Program is created to benefit the public good 2) The program inevitably directly benefits a small group - employees of the agency, contractors, etc. 3) The beneficiaries become dependent on the program. They organize in order to protect themselves politically. 4) In any policy battle where the interests of the beneficiaries collide with the public interest, the beneficiaries generally win. 5) As the beneficiaries win battles over time, the program ends up serving the beneficiaries at the expense of the public.
This is basically the life cycle of every program that has ever come out of Washington. The once mighty NASA now only exists to provide employment to NASA engineers. The school system exists mainly to provide employment to teachers. The AMA exists to erect barrier to entries to the medical profession. Etc, etc.
Your algorithm proposal is amusing because it is basically the same solution to the problem of corruption/factions that the progressives tried during the 20th century. The idea was that "scientific policy" based on algorithms and formulas, designed by academics and civil servants, could replace control by politicians. Needless to say, it was a miserable failure. A classic example of policy via algorithm is the creation of Nationally Recognized Statistical Rating Organization's who used algorithms to dictate which loans regulated funds were allowed to invest in. It did not take too long for Wall St. to figure out a way to structure the riskiest loans imaginable in ways that would pass through the algorithm. The rating agencies are a high profile example, but there are hundreds of other similar failures. In practice "scientific public policy" ends up being the worst of both worlds. It combines the downsides of algorithms (lack of intervening personal judgment when the algorithm gets gamed) with the downsides of politics (corruption/factional power struggles).
And no, it works terribly for universities ( or rather, it works great for the universities, terribly for the public). For example, the number of medical schools in the country has actual gone from 162 in 1906, to 129 today, despite a three-fold increase in population. The artificial barrier to entry created by accreditation constricts the supply of medical schools, resulting in higher tuition and higher medical costs.
Or consider law schools. The cheapest law school in Massachusetts costs 38K per year for tuition. If you wanted to create new a law school as a startup, think you could create one just as good for much cheaper? I bet you could. It's not like law schools need expensive equipment. But you're not allowed to, thanks to accreditation laws.
Accreditation started off innocently enough - it was just a good housekeeping seal of approval. But then the professional organizations managed to make it illegal to practice at all without a degree from the accredited institution. The bar associations lobbied for laws that made it impossible to practice law if you simply studied on your own and passed the bar, or if you went through a correspondence course. In 2008, Abe Lincoln is out of luck. Now he has to take on 150K of debt in order to practice law.
History shows the slow is indeed slippery. What if your startup accreditation body follows the path the law schools, and in 30 years ends up lobbying Congress to ban all non-accredited startups?
Currently, there are zero investors whose money gets you you a visa. Expanding from zero to an unnecessarily small group would still be an improvement, even it if wasn't optimal.
And even if school accreditation were a net lose, that doesn't mean accreditation in general is always a mistake-- that it's impossible to do right. Whenever you try to build any kind of filter, people will try to game it, but that doesn't make filters pointless.
Recently I was talking to friend who had just left law school. He described the process as: "We spend all semester in class where we listen to boring professors who just like to hear themselves talk. Then we do internships where we get paid to learn." I have close friends in architecture school who say the same thing. Almost all the practical stuff about code and structures students learn on the job. The school teaches stuff like "aura" and deconstructionist design. Compare the current Boston City Hall the Old Boston City Hall and you see the results of this wonderful, accredited training. There is simply no evidence that law school or architecture school is a net positive, much less that is worth the cost. (Medical school is a tougher case as care has improved. But this seems to be the result of improvements in science and technology, not schooling).
I hear the same exact stories from people graduating other schools - education schools, meteorology programs, business school, etc. It's pretty clear that the primary result of establishing an accreditation body as legal gatekeeper to a field, is to create jobs for professors and increase wages for professionals. ( note - computer science classes tend to be more sound, perhaps precisely because there is no legal credentialing requirement to enter software programming, and thus the departments must prove their worth the old fashioned way)
If the purpose of credentialing laws was merely to protect consumers, the laws would only care about the results of the schools teaching ( whether graduates could past the Boards or the Bar ) rather than the process ( whether the school was accredited). The law would also allow people to get around the defaults. For instance, your web browser warns you when you access a potentially malicious site, but it still allows you to access it if you really want to. But you cannot do the same with lawyers; you a non-accredited lawyer cannot represent you in court.
And even if school accreditation were a net lose, that doesn't mean accreditation in general is always a mistake-- that it's impossible to do right.
In the context of the American political system of 2008, it is impossible. Washington does not work. You can expect to make a reasonable policy suggestion, and have the actual result come be close to what you wanted. The only thing we can do is keep the poison from spreading through Silicon Valley as long as we can.
Accreditation for colleges is much more, well, collegial. There's no big motivation to restrict supply. It's hard to think of any really good educational institutions that can't seem to get accredited for political reasons. The list of over 1000 accredited colleges in CA starts off:
* A-Technical College (LA)
* ABC Adult School (Cerritos)
* Abram Friedman Occupational Center (LA)
* Absolute Safety Training Paramedic Program (Oroville)
* Academy Education Services (Oxnard)
so it's not just the Stanfords that can manage accreditation.
http://www.ice.gov/pi/news/newsreleases/articles/080409losan...
It's hard to think of any really good educational institutions that can't seem to get accredited for political reasons.
Three years of on the job training is better education than three years of schooling in practically every field. Plus you get paid rather than have to pay. Yet on the job training does not count as education that allows you to legally be a lawyer, doctor, teacher, parole officer, military officer, etc.
The problem with government sanctioned accreditation is not that the specific decisions about which schools meet the requirements get politicized. The problem is that accreditation allows the intuitions who reap the tuition money to define what education itself means.
In CS, this is mostly false. You learn very different things in school and in industry. The former is useful in the latter, but usually not vice versa.
The most interesting thing about it, to me, was that the engineers from the private sector just couldn't seem to understand the political constraints that the government managers work under.
I've only ever worked at small to medium-sized private-sector software companies. It's fascinating to get a look into public institutions and the way civil-servants make decisions.
As a hacker, there's a real danger of only considering engineering constraints, and dismissing organizational or political constraints on a problem or program. I often see bright techies make suggestions that are just naive from a political or organizational perspective. Suggesting a plan that would work great "if only the government weren't so clueless or corrupt" is no plan at all, if you actually have to work with the government.
This is not a direct criticism of pg's essay. I think he's on to a cool idea.
The discussions I've had on similar topics in the past, though, have been really eye-opening. I may be hot-shit technically, and able to hold my own in a meeting, but there's this whole other world of bureaucracy that I must admit I know almost nothing about.
P.S. I found the NIH parts of Darwin's Radio fascinating. The book doesn't have much action. In fact, a lot of the character interaction is between government scientists, and happens in meetings. Nonetheless, I felt as though it gave me an insight into this other world. It was fascinating.
In either case, you're ranking people based on WHO they know, not what they know. Worst kind of ranking possible (it keeps competent outsiders out).
Clearly it would. Clearly having SOME additional number of people admitted who are at least doing SOME version of a startup would be a positive step.
The number of things that have to go wrong to make this proposal a net negative are unrealistically perverse and pessimisitc. If EVERY policy proposal is held to a standard of "we will only do this if there is NO CONCIEVABLE WAY of ever making it be bad," then no policy proposals would ever be implemented.
Think of it like a business. It is better to do something that is approximately right in a non-optimal fashion then it is to do nothing until you are exactly right or, as the poet says, to optimize too early.
Let's suppose there are 2 types of founders: people who have enough money & connections, and the young "live on Ramen noodles" type founders.
For the "money & connections" type, a lot of foreign countries offer cheap but still qualified programmers and don't put too many obstacles on founding companies so if your country is like that it might make sense to stay. For the "Ramen" type, many of them may not afford America's often high living costs.
As for the argument that the US provides a better/more free market... even this is changing: The internet probably allows relatively easy selling to worldwide customers from any country.
All that said, the American dream probably still lives on and many people would likely provide counter-examples to my limited point of view. Of course pg didn't claim that coming to the US is a no-brainer for every single talented hacker. There are probably enough of those who are interested to satisfy the 10,000 founder/year goal.
I think the algorithm PG proposes is something like this:
1. Produce enough that you would be able to convince someone to fund you. Maybe this takes a prototype, a convincing sales pitch, ramen profitability, etc.
2. Convince someone to [seed] fund you.
3. Move to a place with an environment favorable to startups.
4. Continue working on your product, now with access to investors, other founders, good employees, great weather, ...
The idea is to get to step 4 as fast as possible. In most parts of the world you'd never be able to find good investors or a startup-supporting culture, and that counts for lot. As PG has pointed out, there's a huge variance in startup-friendliness even amongst the major cities in the US.
There are already similar visas (EB-5 and E-1). Especially the E-1 category is very close and could easily be amended to fit Paul's ideas (I used the E-1 as co-founder of my previous startup, EVE).
One issue that needs to be addressed: you are not likely to get funding until you move here. But if the visa gives you a grace period (say 6 months) to move first before you get funding, then it will be abused.
Many (or most) of the people taking advantage of such a visa might be those already in the US on student or work visas.
There is a misconception that an investor visa requires cash investment (in the order of $500K to $1M). That's false. This number comes from the EB-5 green card route. The E visa is a temporary visa, but it is valid 5 years and renewable pretty much as long as you want. There is no minimum cash investment required in the statute.
You do need to convince the US embassy of your home country that you have a good business plan. Actually, to be convincing, it better be more than a plan: early customer interest, letters of intent (LOI), etc. all constitute strong elements to include in your application.
In line with PG's idea, letters from prominent VCs about their interest may work as well.
For about $6,000, you can get a good, proactive immigration lawyer to prepare your case, assuming your business opportunity is real.
I think it's likely that if this visa existed, VCs would adapt to it by becoming more open to funding people who haven't immigrated yet.
From what I have seen there is tons of money if your model is great.
I think the counter is true: it's much easier to raise money for bleeding edge ideas in the US. But, ask yourself whether you want to be doing a bleeding edge business (e.g. based on twitter or facebook) or one thats more likely to make you wealthy (B2B).
How would you know? You only hear about the success stories and the spectacular failures, not the full spectrum in between.
But, ask yourself whether you want to be doing a bleeding edge business (e.g. based on twitter or facebook) or one thats more likely to make you wealthy (B2B).
Just because you'd prefer to do a B2B startup you want to deny others from trying to go straight to the top?
By truly great I was meaning something that was a spectacular success. Every company I have ever had the pleasure of knowing personally with a great model had plenty of capital, whatever location they were in. Others who thought there model was great, but clearly was too risky didn't.
"Just because you'd prefer to do a B2B startup you want to deny others from trying to go straight to the top?"
I am not denying anyone from starting anything, just pointing at the facts. It's much easier to get a B2B making money than a twitter widget that isn't charging.
In my opinion, those types of businesses are never going to be the next youtube, so why bother. You either go for the home run or the easy money. But that's just my opinion.
Is there any other options?
Not so: people could do the initial work for startups on student and H1-B visas, which they could then convert if they got funded.
If those programs aren't doing what they're supposed to do, or if they have capital/investment requirements that aren't in line with what modern high-tech companies require (i.e. modern startups don't require as much as the minimum investments for the visas) then we should address that, but I don't think it needs to be done from a blank slate.
(Information on immigration through investment <a href="http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f..., assuming that link is stable.)
"But, but, but: their companies will compete with and disrupt established American businesses, destroying American jobs! Why, a 4-foreigner web news or classified startup could put dozens of (unionized, citizen, voter) newspaper employees out of work!"
Of course I don't believe this is true, nor would it even be a good reason to restrict entry if it were true. (Better to have the new disruptive companies here, than elsewhere.) But that's the sort of deranged logic used against broader immigration. The neat trick of limiting the visas to those starting companies will only help a little against anti-immigrant emotions.
They wouldn't all grow as big as Google, but out of 2500 some would come close.
I suspect close-to-Google-scale successes come more like 1-in-100,000-tries than 1-in-2500. There's a tendency to see every startup as a potential little Google -- we could call this 'Google Goggles'. But Google is one-of-a-kind, and it shouldn't require even one success of that scale to make the case for broader immigration.
For example, shouldn't these visas be available to immigrants whose 'startup' is a donut shop, nail salon, or bodega?
(I also suspect such a program could be easily gamed... but as I'd like to see more immigration of anyone ambitious, I suppose that's a feature not a bug.)
I think this would have such a visible effect on the economy that it would make the legislator who introduced the bill famous.
It reminded me of "Law 13" of "The 48 Laws of Power":
uncover something in your request... that will benefit him, and emphasize it out of all proportion.
Stranger still is the ability for politicians to take credit for bad / poorly implemented ideas that sound good: "No child left behind."
And at least one of the 9/11 hijackers came in on a student visa. The student visa program has not been shut down (although checks for all visa programs have become more stringent).
I wrote to my congressman expressing this sentiment. He replied saying in a nutshell: "Don't worry, I strongly support protecting American jobs from foreign encroachment."
I wrote back to say that this was nearly the complete opposite of my concern, and I asked him to respond with an indication that my original email was not misunderstood. Of course I never heard back.
May be 20 yrs back this was relevant but today just because you offer does not mean quality people need it..so before proposing was there actually needs analysis..did somebody read the Chinese social networks are ahead in revenue numbers and there is huge investment in electric cars..same story with other emerging markets and don't think there are no investment funds there..obviously, people will say there is not enough support but in Silicon valley also beyond seed stage very few outsiders get the funding..checkout thefunded.com for more information..so if you are smart/hard working then stay where you are because you can create opportunities..also worthwhile to read mercury news story about dwindling public companies in silicon valley.. the other part of the story is not there but you can very well guess.. world is flat!
Btw, I have 2 investments in Indian companies and I would not advise them coming to US unless they establish themselves well..simply because starting and growing a company is not easy if you do not have well established connections and good market read..hiring good people also needs good connections..most of the time your early employees are your friends or past coworkers.. This kind of arrangement will work only if the people are going to hand over reins to someone local ..this is exactly and only suitable for mass investors like Ron Conway/YCombinator..and I don't want to say anything on this forum but entrepreneurs while choosing the investor need to see lot more than initial recognition.. I know many people will oppose me here but just walk through a case scenario where this will work..also if you are going to throw in Google example then please do thorough analysis.. My advice to young entrepreneur is just go in the market where you understand things not that looks shiny.. there are no overnight successes..and don't quit something you have (can have) simply on the word of an investor..definitely not for the people who can not be with you till you get cash flow positive..(just to be clear I am not taking swipe at either Ron or YCombinator program..i am just talking in context of extending (and "assuming") its relevance to international teams without really understanding the other side)
If so, then the answer is that it depends on the country and the nature of the startup. There are certainly some combinations of country/startup where the founders would be better off in Silicon Valley. It's up to the individual founders to decide if theirs is.
I don't believe in this assumption -- "There are certainly some combination of country/startup where the founders would be better off in Silicon Valley - when we are talking about founders who need visas (they can't get EB5 green card which is given based on investment or business visas which are pretty much given to anyone who has valid established business or who are not already in US as a student/employee..in that case founders do get H1B easily transferred for their own company provided they can show company of substance..if they pursued advanced degree here then they don't get in H1B cap)..so limits to be the people without much of resources of their own - who don't understand market here (at least not on first hand basis) and don't have connections..how will they succeed.. why misguide some of them and also fool ourselves that such a thing is useful..especially, given there is much better chance if they stay where they are then they will be able to pull off something successful targeted at the market they already understand
and that too putting up number of 2500 such startups every year ..good idea to write 2 examples to validate it first..tell me some story..
so my point..people should start company where they understand the market and if US wants to benefit from international resources then investors should go outside US because only that will work..because that is right for startups/founders/investors..
I've gone through the process, and despite it being a lot of paperwork and requiring the help of a lawyer, it was ultimately a good experience.
In order to get such a visa, one has to submit a business plan, and show sufficient funds from abroad. Interestingly, the funds only have to be appropriate for the business to be started, there is no set minimum like a lot of people assume (e.g. 100k). An example my lawyer gave me was a woman that wanted to start a horse riding school, and who got her E-2 by proving an investment of ~30k into her company.
I started an internet business, and my investment was in the same ballpark.
Also, for founders already living in the US, it is ok to work on setting up the business, e.g. incorporating etc, while applying for the E-2, as long as no customers are being engaged and money is being earned.
A downside is, that there is no straight path from the E-2 to a greencard; other then upping the investment (which has to come from abroad) to $10^6.
Edit: There is another downside, mentioned elsewhere in this thread. One has to be from a 'treaty' nation.
Disclaimer: I'd strongly advise you to consult an immigration lawyer if you want to do this.
I am currently holding a Highly Skilled Migrant Visa from the UK, and this was the only way I could start a startup there. After the visa was available, I quit my job and started my own business. I think with this visa, UK already went ahead of U.S. in this respect.
I agree that in order to reduce competition with American citizens, the Founders Visa may be limited to working in your own company. Founders don't want to be employed (I strictly don't - even was gonna refuse Google if they made an offer) and new companies create job openings. A Visa of this kind would be totally adequate for someone like me.
I didn't like the "Let investors choose" criteria. What if I am self-funded? If I bring my funds in, isn't that even better? Also it is highly subjective whether a founder is going to be successful or not. I think the election strategy should be based on founder's age, education, past earnings, work experience etc. just like in the UK scheme: http://www.workpermit.com/uk/hsmp_calculator.htm
Yes this is not the best criteria to select successful founders, but at least it is a "secure" criteria, i.e. you choose people elite enough that they won't hurt U.S economy. You could start with a "science/business graduate founders" scheme, and extend it based on success.
My last words go to Europe. Europe is living in the past. I wanted to attend FOSDEM in Belgium, was requested so many difficult documentation for Visa, that I decided not to go. I will probably never go to Belgium or similar countries, not because I hate them, but because its simply not worth the effort to visit those countries.
I don't think you need to define progress.
PG's suggestion was that they cannot work for other companies, so they are not depriving anyone of a job. They will have to live somehow (on whomever's money they have), and that will go into the local economy. If you add a clause to the visa that they cannot claim any type of social welfare, then I think the potential downside of 'gaming' nowhere near outweighs* all the potential upsides.
* - opportunity cost of the 10,000 spots excepted, which is why you have the right folks picking the 10,000.
There's an underground economy, and it doesn't always involve narcotics/guns/prostitutes/dog fighting/etc.
While I deposited checks (one potential obstacle), I don't think anybody would have quaffed if I asked them to pay me via PayPal, where I could transfer the money to a friend's ("accomplice's") bank account.
Step 1. Pay lobbyist to add the following clause to the rules: "Treasury will provide 20:1 non-recourse loans to participating investors" -- to attract the 'hot money' and foreign capital, of course. Just copy the clause right from PPIP, in case you think it's not possible.
Step 2. Wealthy foreign investor: send random minion on 2-year luxury vacation to the U.S. Invest in minion's "startup" through some convoluted channel (perhaps a Wall St. Bank's unofficial immigrant startup investment fund).
Step 3. Sell "consulting services" to minion's startup using your U.S. shell company.
Step 4. Free Money.
Obviously there are good and easy ways to prevent this absurd little tinfoil hat scenario I've constructed in the bat-filled cavern where my brain should be. But considering the recent track record of our government botching up finance-related issues, I wouldn't expect anything less...
-- American-born son of an immigrant Indian scientist
Do you expect me to risk everything, to pour my life and blood into a business while under the stress that if anything goes wrong I am on a plane with a one-way ticket to a place where I have nothing anymore, together with my family and away for any of my friends?
Do you want founders? Do you want INVESTORS? Anything less than a Green Card is a spit in the face. Take an example from Canada or UK who both offer directly residency under a set of qualification rules, not $1m.
Stop treating us as we're nothing more than students happy to receive a couple dozen k as if that was an actual serious investment. Oh wait...
Of course there are different views. For other countries who wants to compete Silicon Valley, it is bad. For those who concern rights of visa workers, more visas may only make problems worse. You can stands there and discuss those disadvantages logically, but you don't need to burst emotional responses---it won't help changing opinions of the other side.
BTW, I think this visa plan is only an initial step and clear path to a Green Card should be shown as the next step. After September 2001, it seems that employment-based Green Card processing is taking longer and longer. Some of my friends are waiting 5-6 years already. There's not much point if those who has built successful business have to stay on non-immigrant visa status.
As much as I support your position (I'm an open immigration advocate), the concept of "Let the market decide" isn't exactly a position I hear the government ever clamoring to support. The government wants control, and giving up control is it's antithesis.
Very cool.
I don't see why the potential benefit to the US of immigrants with startup ideas is necessarily greater than immigrants of similar technical skills with no stated intention to start a company. But the immigration fee could help in sorting that out.
http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f...
in asking the would-be immigrant to put up talent rather than money as the sign he will run a successful business. That's in line with your usual take on how easy it is to start up new businesses in today's economy.
It's an intriguing idea to broaden the talent pool available for seed-stage investors to invest in. The political objections will revolve around
a) What happens to the people who start up but flame out, failing in their businesses? It's expensive to deport people who have already arrived, and they sometimes disappear from the view of law enforcement.
b) Why shouldn't the United States start-up investment market be preferentially granted to persons who have legal right to work in the United States? (My bias is toward free movement of people across borders, but the only reason immigration law exists at all is that not everyone shares my bias, not in any country.)
P.S. I am a lawyer, and used to practice immigration law, although the bulk of the cases I worked on involved different visa categories.
I think pg+hn+/. etc could generate 50k signatures.
ideas?
Paper letters are the currency of elected representatives, and a stack of 10k letters descending on numerous offices would do infinitely more than a lonely web page with 50k e-mail addresses.
http://whitehouse2.org/priorities/1948-visas-for-startup-fou...
Maybe in 1989, this would have made sense. But capitalism has had enough converts that most countries have pretty low barriers to high tech startups now.
IMHO, people who are already entreprenurial in their home countries will be the last people who will want to immigrate to the US. Maybe pg looks at the number of companies founded by immigrants and thinks that he can increase that number by creating a new visa class for founders. Immigrants start businesses because American culture is much more stable, open to startups, tolerant of failure, and gives people second chances; so many immigrants let go of their previous cultural biases and become founders.
If you're already an entrepreneur in a poorer country like India and China, why would you immigrate from there to a country where all expenses are vastly higher. I mean, American companies are setting up development centers in India and China. For richer countries like France and Germany, you give you any existing networks and go to a new place. Seems like a net loss to me.
You have stay in a culture for a while before you recognize business opportunities there. I bet that most of the immigrants who start things do so after staying in the US for 3+ years. My claim is that a new immigrant will do worse at business than average.
You'll have to let in lots of smart people and hope that some start companies. Maybe you can set up the rules so that it's easier for the smart new arrivals to start a business as soon as they're ready.
Currently, due to various rules, the most common route to permanent residency takes approx 6 years of continuous employment with the same employer for an immigrant to gain unrestricted rights to do business (this requires permanent residency). So for somebody who arrived for a Master's degree (being simplistic and using Master's as a proxy for smartness), it will be 8 years after arrival. This same person may have understood the culture well enough in 3 years and be ready to start a business.
Do the investors have to be Americans, or is it enough that the investment is spent in the U.S.?
When the money runs out or the startup fails, are the founders asked to leave?
If your goal is to persuade as many people as possible, insulting the previous administration and by extension those that voted for Bush is a bad start. I was already opposed to your idea before the second sentence, despite the fact that I'm an advocate of increased legal immigration.
That said, I didn't really get an answer... you say you're in favor of increasing legal immigration - are you in favor of changing the mix, of do you think that we need to go way above the current level of 1.2+ million a year?
How would such a visa benefit foreign investors? If there is a shortage of good entrepreneurs in the States, wouldn't it be easier if the VC's start fishing around the world instead of waiting for all the fish to come to their own pond?
Y Combinator should take a hint from their UK/European counterpart, Seedcamp. Starting in London two years ago with a similar model as YC has in the US, they have started organizing local mini-Seedcamps throughout Europe to make it easier for the startups to apply: the first mini-Seedcamp was last year in Kiev, Ukraine, while this year they have a tour of seven cities -- Tel Aviv, Paris, Warsaw, London, Helsingborg, Ljubljana and Berlin; check www.seedcamp.com -- where local startups may apply towards the main event in London later this year.
I've met dozens of people trying to gain entry to Canada and the US, and it's common knowledge that you can game the system with money. This would just provide another entry point.
You would have to define what is a successful startup, in simple legal terms, and people would find ways to satisfy the definition and stay in the country.
I have experienced first-hand the difficulty of moving to a new country, adapting to a new system, trying to build a new social network. Any genuine startup founders would have to contend with all this, all the while knowing that if their business fails they're booted out of the country.
Anyway, I believe the reason entrepreneurship works so well in the US is because we allow people to fail.
But if you think the U.S. is already tapped out of top entrepreneurs, your not looking hard enough.
What would the costs be to enable those already in America? Things like school loan deferment and establishing incubation investment vehicles in at least 10 other cities could enable at least 10,000 Americans. Sure that costs something. But if you think it would be cheap to oversee a special program for 10,000 "entrepreneur visas" a year, then you haven't spent much time at immigration offices ;).
If "I" were to start a firm , all that matters is talent, I would cherish to work with fellow American workers. Remember in the modern age , the more varied my fellow workers are , the richer is my experience. Each one of us has an amazing story to tell, along with the rich experiences from our varied backgrounds.
I do understand the worries about the American workers right. Its genuine, and I respect it.
Thanks, Paul, for another excellent essay.
Cost me more than $6K (in attorney fee, etc) and countless number of hours to prepare all the documents without any guarantee that I'll get it.
It _is_ more scary than applying to YC, now good luck to myself.
I think it's a great idea, btw.
Of all people BillG has actually been before congress and represented on this issue. He had said that Microsoft had often been naive with regard to the contact needed in Washington to get things changed.
Modernising this idea, how about Eric Schmidt?
On the other hand, it's hard to underestimate the irrationality surrounding this issue.
Edit: What meaningful changes could the Obama administration make without having to go through Congress?
The rest of the idea seems sane, though, as long as the application for the visa made it clear what the intention was, on top of "I want to found a company or companies please".
Non-US resident here, for what it's worth.
1. All visa applications must have a "CERTIFIED" viable buisness plan.
2. Sensible cash amounts should be with the applicant along with the good credit standings - Its foolish to ask for 100K if you are starting a Web2.0 business.
3. Periodic progress reports to be submitted , certified by auditors.
4. Initially for 2 yr , and then renewable depending on numerous factors like success etc
To put things in perspective: most (non-European) foreign nationals are required to hold a transit visa just to make a connection via an US airport. To obtain that visa you need to go the local US consulate and schedule an interview. Not for study or tourism, mind you. Just to step off a plane and board another 2 hours later.
For those who don't know Sanskrit
"Vasudhaiva Kutumbakam" == (roughly) "(Every one in) The world is my family"
I wish people wouldn't drop into non english languages without providing a translation. If someone were to sprinkle his messages with Swahili (for example) I would be lost.
That book claims that existing companies create more jobs than new companies. Starts at page 153: Here's the google books link: http://bit.ly/m4vXV
I'd like to see a few more of these in Etherpad.
are there any greencard holders having thru h1b (6 years?) and then found startup and be as successful?
Many people are facing the same problem
The first reason is that the employer knows his worker is dependent on him – he can thus get away with a lower salary, etc... The second reason it is bad is that you cannot quit and start a start-up – if you do not have a sponsoring company you must be out of the country in 60 days.
The third reason is that it deters people from going to the USA. I really want to go to California next year – but with that Visa system it is not going to happen (probably going to London). Compare the US system and the UK's General Highly skilled Visas (e.g. http://www.workpermit.com/uk/uk-immigration-tier-system/tier...) – it is really no fuss and valid for a time period.
There are already more than 5 million Mexicans in the US. Would 1 million engineers and scientists really be a bad thing?
No it doesn't. I am sure that there are Mexicans from the whole spectrum of the population (doctors, engineers, manual labourers, etc...).
With highly skilled visas you can assure that you only get immigrants from a certain section of the population (Engineers).
And, 1 million engineers and scientists would depress salaries in the US. That's a plus for founders, but a minus for engineers and scientists trying to find work.
I'm almost always on the side of greater immigration into this country, but I can see the downside of it as well.
Saying there are over 5 million Mexicans in the USA is a completely factual statement. It is true that you have much higher immigration (both legal and illegal) from neighbouring countries than parts of the rest of the world.
> And, 1 million engineers and scientists would depress salaries in the US.
Maybe. But either companies move to where the engineers are (outsourcing, new companies) or the engineers move to where the companies are. In the latter case they still pay tax for the US.
And American engineers will have a depressed salary in any case.
Comments of the form "the article is loosely related to one of my pet issues, so I'm going to say my schpiel" are not interesting.
For what it's worth, I think the founder's visa is a great idea. I know this sounds corny, but it's an extremely American (entrepreneurial, meritocratic) idea.
A lot of people start startups while they are working. This simply makes sense, because getting capital for a start-up is fairly difficult.
A lot of people also try a startup and if it fails, re-enter the job market (after 6 months for example) and start again when they get a new idea.
A general visa that would allow a person to move from employment to starting his own company back to employment would be much more useful than just allowing people to either work or only have a founder's visa.
Also, how many start-ups where founded when a group of employees broke away from an employer and started their own thing? Neither a founders visa or H1B would make provision for such a situation.
> Comments of the form "the article is loosely related to one of my pet issues, so I'm going to say my schpiel" are not interesting.
That may be true. But I see little use in commenting on something that is not relation to any issue that I am interested in. If the comment is out of line then that is what the moderation is for (either flag it or downmod it then).
"If you don't have anything interesting to say, don't say anything."
I will just mention that for the parent post, at least 20 people found it interesting or to the point (since it has a moderation of 21).
In any case, it is still more on topic point (emigration visas) than your discussion about my post.
EDIT: I find your posts a little bit harsh. Why not tone it down to at least leave a semblance of civility? (This is after all not Digg or Reddit).
If a foreigner is ready to accept a job with a company offering him a lower salary,it depicts that just he want to get into US somehow.
I don't get your point, are you saying this is a bad thing?
The system would be unbelievably easy to cheat. It also would be stupid easy to turn a "startup" into a money laundering scheme.
Don't take this the wrong way: I really wish that there were an easy way to let legit founders into the US. But it just isn't practical.
Let's see:
The INS has their hands full...
PG said: 10,000 people is a drop in the bucket by immigration standards
For comparison, there were 591,050 student and exchange visas granted in 2007 [1]. If the INS can handle checking up on individual students following educations via Universities, they can do the same with 1/200th the number of startups via investment firms.
The system would be unbelievably easy to cheat
Oh, how? And why is accreditation a viable solution for Universities, but not investors?
I really wish... but it just isn't practical
Give one shred of evidence aside from senseless pontification and I might consider it.
Yes, in terms of people. But you fail to understand that it's an entire new process and system that would have to be invented and executed.
You just don't think like a con-man. Universities have quite a bit on the line, such as accreditation. A private company has next to nothing on the line. Anyway, here's how I'd do it:
1. First off, I'd need to know somebody in the US who has a viable business and would vouch for me. Because immigrant communities support business focused on their interests, this wouldn't be very difficult. Of course they'd agree, because of the benefits for the home country (sending money home, etc.).
2. Have them offer fake investments to me and a pool of founders. Get approved by INS/State.
3. Once in the US, work as I please. Funnel this money back into the "startup" as profits. Plenty of startups can't even turn a profit, so financials wouldn't have to be impressive.
4. Rinse, repeat. The same business would only get approved so many times, but there are tons of businesses here.
Now, for the unscrupulous way (since there's nothing particularly immoral about the previous scenario). Note that I'm for the legalization of drugs, but that's not the point: The US gov't is sure as hell against that.
1. Have associate(s) in the US prop up a shell of a business that appears to be legitimate. Have them offer a huge investment for what appears to be a startup's credible business plan.
2. Move in under an alias with fake documents.
3. Funnel drug money through the "startup," which would be an ideal money laundering node. Because the plan is intended to produce successful businesses, nobody would blink an eye at the eye-popping profits. Just bullshit as much as necessary...if YouTube cooked the books, they could convince people that they were turning $150M profit annually easily. Show your cards as you please, since you're holding the deck.
4. If things get even remotely hot, leave the country. So much money's been successfully processed at this point that it's undoubtedly a net win. Hell, say you're flying to Lima to make a commencement speech on business. Nobody would stop you. The associates could claim ignorance obviously, as you were just some entrepreneur they put their hopes and dollars in. Even if the startup were irrevocably linked to money laundering, you're back home and extradition isn't happening, since you used a false identity.
5. Rinse, repeat with other associates.
"Give one shred of evidence aside from senseless pontification and I might consider it."
Evidence on a virgin immigration plan? I'm sure there's plenty out there!
Let's flip this: Tell me how you prevent either of the two previous scenarious, short of having the gov't handle the entire recommendation/approval process, which would pretty much defeat the purpose.
Sigh ... people are so naive.
The obstacle I see is that the stake of having authority to say who can get visas for work is very high these days (not like student visas); lots of people are seeking ways to get working visas desperately. So there would be lots of political frictions to introduce investor's accreditation system.
But yet, if politicians are convinced that this is crucial to revitalize the economy (which is probably one of the highest priority items), much of such muddling of power games may be avoided.
Accredidation - similar to the way that Universities do.
Sounds a bit like your first thought was along the line of "visa == immigrant == [name your third world country]". There are (still) many people in old Europe or Japan who think that US is a hotter place than home for a startup... and I'm part of them.
It's slowly changing though, I feel it around me : patents and costs of litigation, Sarbanes Oxley (IPO exit... gone ?), visa problems (the lottery thing with H1-B visa). It did hit quite a lot the American dream.
Specially when it comes to opening a branch in the US for small businesses : insurance costs literally explodes, it's harder to send employees to the newly created branch (H1-B is not the only solution, but it was the one that scaled the best), so it's harder to control it.
I used to work in New York City, with an H1-B. When I decided to create a startup I eventually trashed my H1-B and went back home. I didn't want to, but between keeping a day job and doing a startup part-time in the US, or doing a startup full time home, I choosed the latter.
I still think that US would have been much better, and I liked the life there quite a lot too (much more than horrid Paris), but well, my cofounder was in France and could not come... had there been a startup Visa, he/we would have applied, and we would have moved to SF.
Incidentally my former NY employer opened a branch in Switzerland, which is slowly becoming the main office... one of the reasons is the visa issue : it's much easier to move a US citizen to Geneva, than a European citizen to US... So in the end there might be just one marketer remaining in NYC, while it was supposed to be the opposite at first !
(For people wondering my first startup attempt did fail quite miserably... second attempt is faring pretty well so far)
Second, pg's proposal seems to be a more targeted version the of E-1/2 visa with the additional benefit of shifting some of the administrative burden onto the shoulders of investors. So it's probably less work for the INS than the existing E-1/2 process.
Sounds like a pretty good deal for the US tax payer.
1) The USA benefits: more companies that pay taxes and pay for services, and create jobs for americans.
2) The founders benefit: they get a chance to bring their ideas to fruition, and get rich.
3) Paul Graham benefits: improved competition in the startup world would bring better founder teams to Y-Combinator.
4) The general public benefits: good ideas get implemented and are available as services that improve, in some way, your life.