Let's Give Visas to Startup Founders
businessweek.com
businessweek.com
This is the fatal flaw in the program. The whole reason startup culture exists is that we don't have a way of knowing in advance what ideas are really worth pursuing, short of giving them a try. But this program would create a board of experts whose job it would be to try to predict which ideas had a reasonable chance at success.
The obvious outcome would be a huge distortion in the kinds of startups foreign nationals would found. The value of a green card is far higher than the expected value of a startup, so the process would turn into a bad example of grantsmanship - trying to tailor your proposal to what you think the committee wants to see, and then making sure your startup stays solvent long enough for the permanent residency to come through.
Rather than taking real risks and trying to innovate, the role startups are supposed to take in our economy, we would be encouraging an extremely conservative startup culture, whose real purpose would be to secure green card status for the founders lucky enough to get in the program. How likely are you to bet the company if the consequence of failure is getting kicked out of the country?
For proof, look to H1Bs. H1B employees are paid significantly less than non-H1B employees. Don't like it? STFU or go back to your home country.
That is one alternative. Another is coming up with a program that doesn't allow MegaCorp to abuse its H1B employees and depress market wages for US citizens at the same time.
Home country is not necessarily Bangladesh, it could be UK or Switzerland, in which case the H1B holder can and does negotiate for market rate salary or he will go to his home country where he is payed fairly and life is just as good.
The current advocates of the Startup Visa probably have honest intentions, but I guarantee that after 10 years, the startup visa will work similarly to the H1B program.
There's an additional problem with this proposal - may great startups don't feel they need investment, which allows them to avoid VC's or hold out for favorable terms. From what I've read, this trend is increasing, and I'm pleased to see that founders with technical backgrounds are gaining power relative to investors with expensive watches and MBAs.
But with this proposal, investors would control more than money - they'd control the right to reside and work within the United States.
I don't enjoy being so cynical, but having witnessed the abuses of the H1B, I am absolutely certain that VCs would use this visa to gain power and push around the founders.
I jokingly told a doctor last week I could write health care reform in 5 pages. I'm pretty sure I could. But it wouldn't get through congress in that form.
Look at it from a policy maker's standpoint: strip out the happy talk about money and jobs. What this boils down to is a group of rich people on the left coast asking for a grant of power, the power to give visas, with no oversight. The politicians doesn't know these geeks from anyone, and here they are asking for a slice of government power.
So they propose a committee to make sure this doesn't become a loophole for rich fugitives and tax-evasion. Certain types of people smell a cushy job and the role expands, the idea gets paraphrased to someone at WSJ and we end up with that sentence.
So my one data point says: a good US immigration lawyer and an accountant who understands how to value software companies does do the trick.
The E2 Treaty Investor:
Nationals of qualifying Treaty countries who have made a significant investment in the United States may qualify for E2 Treaty Investor status. Like the E1 visa, there is no set minimum level of investment which may qualify for E2 status, but the lower the investment the less likely one is to qualify. Again, the level of investment must be sufficient to justify the treaty national (or his/her employees) presence in the United States. The investment must be in an operating business – i.e. simply buying property or stocks and bonds does not qualify. Also, a substantial part of the investment must have been made before applying for E2 status.
A system like this would reduce the distortion, and allow talented people into the country to bootstrap or e.g. work at Google.
Even if the non-US startup will move to the US once they receive funding, the largely intangible advantages bestowed on a startup in the Valley (which I've witnessed in the month that I've lived here) give it a better chance.
To be successful in facilitating the immigration of founders to the US, the founders' Visa should be available to any startup that has received any funding from a "qualified US investor" over $15K, which would include non-US startups accepted into YC.
And to avoid creating a huge immigration loophole (which seems to be the author's rationale for suggesting a "real money" cutoff), perhaps the Visa could have a clause that limits it to two years unless additional capital is secured and the startup is deemed to have "passed muster", at which point a permanent resident visa could be granted.
It might be more likely than you think. If the startup and the founders are solid, and if there is a clear (and most importantly, fast) visa path like the one proposed, I don't think most investors would have a problem. If anything, $250,000 is way too low for a VC, so you might have to find an angel investor instead. Some countries would have an advantage over others, of course, but I don't think it's a showstopper - my first startup, based in Canada, received an offer for funding which would've put us over this threshold.
Even if the non-US startup will move to the US once they receive funding, the largely intangible advantages bestowed on a startup in the Valley (which I've witnessed in the month that I've lived here) give it a better chance.
Can you elaborate? What is the difference, once both startups are in the Valley, and assuming there are no language issues? So many startup founders are already originally from other states or even countries.
I don't think that every startup needs to be in the Valley to get funding, but what I've witnessed here is a prime example of "it's not (only) what you know, it's who you know". If you have a viable startup, knowing people that have made names for themselves in the startup scene, many of which are based in Silicon Valley, can go a long way towards getting introduced to potential investors, whether they be angel investors or VCs.
My point is that P(Canada/foreign startup getting funding) is greater than zero even with today's visa situation, and is still large enough to make a visa program worthwhile, even if it is smaller than P(Silicon Valley startup getting funding).
Many of those applicants are potential startup founders. Sadly they cannot pursue their ambitions due to the long immigration process. Some of them will choose to leave US and found their startups in their home countries.