In 1999, when Miguel de Icaza and I founded Ximian, one of the first challenges we faced was getting a visa for Miguel so he could come to the US from Mexico.
Miguel was not eligible for an H1B visa — the most common type of immigrant work visa — because he did not have a college degree. And H1B wait times were long and unpredictable. Foreign programmers were flooding into the US, and despite several emergency extensions to the H1B quota, some people were getting stuck in line. The fact that Miguel was co-founder of a funded startup was meaningless to the INS.
Our lawyers suggested various things. One idea was to create a subsidiary in Mexico, and to employ Miguel there. After a year, he could move to the US under an L1 visa, an intra-company transfer.
Needless to say, a one-year delay and the expense and complexity of setting up a Mexican subsidiary to satisfy immigration laws didn’t appeal to us. We had raised about $100,000 from friends and family, and we didn’t want to spend a single day or dollar on anything but building a great product.
Besides, it made no sense! We had investors eager to put millions into our company so that we could hire dozens of programmers and, hopefully, create a wildly successful American software company. Should we spend that money in the US or somewhere else? Why was the government making this so hard?
Eventually we did get Miguel into the US, on a strange, little-used visa called the O1. The O1 is generally given to top-tier classically trained musicians, professional athletes, and Nobel Prize winners. Miguel already had a lot of very visible accomplishments, and had appeared in a lot of newspapers and magazines. TIME magazine had named him one of the top 100 innovators in the world. So we put all of these clippings together and mailed them to the INS. Thankfully, they issued the visa. But the O1 is a nuisance — immigration officers looked at him strangely whenever he entered the country, and he had to go back to Mexico to renew it at the US consulate every 6 months.
I’m glad that we found a solution for Miguel, but the O1 is not a viable option for most startup founders. And with H1B rationing much more stringent now than it was 10 years ago, things are even tougher for would-be immigrant entrepreneurs.
Which is why I have been extremely energized by the growing movement in the startup community to lobby for the creation of a Startup Visa, which would be issued to any founder owning more than a threshhold amount of a VC-funded, accredited startup.
This idea was (I believe) first put forward by Paul Graham in his essay, The Founder Visa (which you can watch him typing here – very neat). The torch has since been taken up by Eric Ries, Brad Feld, Dave McClure, Shervin Pishevar, and others. The StartupVisa.com blog was put up to start organizing the energy and enthusiasm around this idea. The current proposal is to modify the EB-5 visa, which allows immigration for wealthy foreign investors who put at least $500,000 of their own money into an American company, to also cover foreign founders.
I hope and believe this movement will get a lot of support from the software world. There are too many high-profile examples of successful tech startups that were founded by immigrants. In fact, a study from Duke University and UC Berkeley found that 25% of US technology companies founded between 1995 and 2005 had at least one key founder who was foreign-born. Sergey Brin, cofounder of Google, is a native of Moscow. Charles Wang, the co-founder of Computer Associates, was born in Shanghai. Pierre Omidyar, eBay founder, is French-born. Most of the original PayPal founders were non-Americans. Are these the kinds of companies we want to chase from our shores?
The immigration debate today is centered on the concept of “stop loss.” The argument goes like this: foreigners who come to the US are taking our jobs. We have to stop them.
Unfortunately, this is an argument that considers only downside. But America was founded on the upside of immigration. What would happen if we brought thousands of new entrepreneurs into our country, each one of them already backed by accredited venture financing? How many tens of thousands of new American high-tech jobs would be created, overnight?
I’m not sure what the next steps are for this movement, but in the next several months I’m going to look for opportunities to support this initiative in any way I can.
Update: I’ve started a list of American startups with immigrant founders. Please help me fill it out!
Posted on 31 October 2009
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I have sympathy for people who want to require that people entering the US have a visa. But my gut feeling is that anybody willing to abandon home and community is already at heart an American and should be welcomed, just as the poem at the feet of the statue of liberty says: “Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!”Not, of course, that I think Miguel is wretched refuse. Not anymore anyway.
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People who think immigrants take “american” jobs miss the point completely. They have a mistaken impression that a limited number of jobs exist. But as the number of people who enter the country *to work* increases, so do the number of jobs.
The main reason we have such a huge problem with illegal immigration here, in my opinion, comes primarily from our excessive handout programs. Paperwork aside, people in this country get taken care of rather well by the government. Rejecting people who want to come here to *work* seems ridiculous, when we have so many people here who refuse to work and still get taken care of.
Please note the distinction here between those who can’t work and those who don’t. I support taking care of those in the former category who have nobody else to take care of them, though I think we could do so better with voluntary non-governmental programs, but those in the latter category should not derive any benefit from such programs. I know more than one person who has decided to remain unemployed because it pays better and doesn’t require them to do more than a nominal job search and occasional brief stints of employment.
Speculating a bit, it seems like if we didn’t have such a monumental infrastructure in place to support people who don’t do squat, we’d know that every person who entered this country would make it *better* for the rest of us, not worse. We could throw open the doors to anyone who wants to come here.
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This makes no sense:
“But as the number of people who enter the country *to work* increases, so do the number of jobs.”If that was the case, then there would not be 10% unemployment.
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Logical Thinker, you’re not thinking hard enough
The idea is that whoever enters the country and works, earns an income. That income would be used to consume, creating demand. Which in terms would create jobs to fulfill that demand. This is neither completely true, nor false. Quite often immigrants from poorer countries will send money abroad to their family. This will lead to more consumption in their country of origin. Whether that is a good thing, is up for debate.
The employment rate has nothing to do with it. Unemployment by it’s definition also includes those that are in the working population but don’t have to work and choose not to, because the they are rich. It includes those who choose to be unemployed and rip off the tax payers. But mostly unemployment is caused by a mismatch.
Because of that mismatch, even with high unemployment rates you will find companies unable to fill vacancies because of a shortage of properly trained candidates. While on the other hand people are unemployed because there are no jobs available they are trained for.
And a lot of people are very resistant against starting over in a complete new line of work. Especially if they liked the old one. I like this idea of a startup visa. Nat’s story makes me wonder what would have happened if this had been in an EU country.
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My advice: give the US a body swerve, and set up your company somewhere else. The US is the least welcoming, most paranoid country I’ve ever had to misfortune to visit and do business with.
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as a US immigrant I gotta disagree with you!
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thanks for posting this Nat… great to hear another case study on why we need a StartupVisa!
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Good post Nat, startup visa is a nice thought. Then again, IMHO, considering the penetration/availability of broadband Internet and reduced cost of operations ( && living), software startups would have a much favourable environment in a place like India and China. (If the product/idea is for the masses, remember these two contribute to most of the world’s population!
)However, the founders need to hire only the proper ones, and not any other guy off the ‘talent pool’. [Guess you have an idea what am referring to]. Am not quite sure about what visa restrictions are, in China; but in India, a business visa can be an option to stay for one or more years. Also, this post reminded me of this article.
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I agree that something needs to be done about inviting entrepreneurial minds to America, but another visa is not the solution. While we’re citing Google’s success story, lets not forget that Sergey Brin wasn’t in America on a non-immigrant visa. The proposed Founders Visa is just that – a non-immigrant visa that REQUIRES you to be successful, or get out of the country. How that is going to nurture risk-taking is anyone’s guess.
Imagine if Brin were here on a temporary visa that required him to get a PhD and be successful, or go back to USSR. Would we still be having this debate?
The solution is to make IMMIGRATION easier, not just add another non-immigrant visa to the list of already incomprehensible options.
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I agree, an immigrant visa would be far preferable to a non-immigrant visa. If your startup fails, you and your family should be allowed to stay and try again.
By the way, “visa” doesn’t just mean non-immigrant visa. There are immigrant visas that lead to permanent settlement, like the CR1 or IR1 visas.
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You’re right about immigrant visas. But, it doesn’t mean that those visas make immigration any easier. By definition, a visa has only to do with your entry and presence in a country. H1B is also a dual-intent visa, which means you could use it for legal presence as well as facilitating US immigration. The problem is not a lack of visas. The problem is making sure that those on visas are able to convert them into legal immigration documents.
Like you mentioned, given the circumstances, there are available visa options to facilitate the entry of any number of qualified entrepreneurs. The problem is in making sure that such an entry is unconditional.
The startup visa proposal takes a theoretical approach to the problem of legal ENTRY into the US, skirting the immigration issue altogether. Even if the proposed visa were to be made immigrant by nature, it would hardly benefit anyone. For example, immigration numbers are limited per country. If I am from India or China and am not an established person in my field, I am looking at a minimum of 6-7 years before I could consider myself a permanent resident here. This is not a problem when you’re young and straight out from college. When you’re older, you cannot move along with your family just like that.
Really though, instead of bandaiding this mess, you should be trying to force the congress into adopting comprehensive immigration reform. That is the only true fix.
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Comprehensive immigration reform needs to come. And my hope is that movements like Startup Visa will help lay the groundwork for that.
The data is clear on this. Immigrant founders are great for the economy. What’s broken is our Congress. Many legislators are not willing to do things that make sense for the country and the economy because of soundbite attacks and corruption.
I hope that the startup visa movement can help increase the pressure on congress to stand up and do something that makes sense.
You’ve helped me understand that focusing on EB-5 is the wrong thing. It’s not a good endgame. I don’t speak for anyone else, but it seems to me that the startup visa movement has not yet definitely settled on a desired endgame. This is all a work in progress.
I think one of the best things we can do is to muster the evidence that immigrant entrepreneurs are hugely net positive for the country. Make the evidence overwhelming. That’s why I created this wiki page listing American high-tech companies with immigrant founders:
http://wiki.nat.org/index.php/American_Startups_with_Immigrant_FoundersWhat are the next steps for the startup visa movement? Frankly there doesn’t seem to be a strategy yet. I’m glad you’re in this discussion because you’re dead right that amending EB-5 is a bandaid.
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What did you have against moving to the United States of Mexico and starting your business there?
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In theory, nothing. But our investors and most of the people we hired were in the US.
We did also hire a lot of non-Americans and eventually had a pretty big Mexico City office:
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The “protect our jobs” immigration issue is a strawman setup by the pro-illegal immigration folks so that they can control the debate and make their side look better. By painting the opposition as a bunch of Mexican-hating rednecks then it makes their agenda easier to push across.
Having people in this country to work is such a amazing advantage economically-wise…
The problem that we face is not one of legal immigrates taking jobs, but of illegal immigration taking advantage of our medical system, abusing the laws of the country, and introducing higher rates of crime and disease.
I would like it if every person wanting into the country was a person that wanted to be production and make money for themselves and other people. However that is not always the case. You have a large influx of criminal orginization, for example, that come in with drug trafficking and that sort of thing. A full third of people in federal prisons are in this country illegally.
What illegal immigration does is that it introduces a second-class citizenship which people get prayed on by businesses and criminals and they have no legal recourse. These people are abused, do not get treated fairly, do not get benefits. Then it is up the rest of the society to take the burden of protecting and maintaining the community of these people who are (depending on the individual, of course) either unwilling or unable to take care of themselves.
Besides increases in crimes another negative effect is large increases of diseases.
In the USA we practically eliminated serious deceases like tuberculosis from our society. For something like 30-40 years you could count the number of serious infectious cases annually with your fingers. Now, however, we have the situations were people who cannot afford proper healthcare in Mexico come across to places like California and Texas and take advantage of our policies regarding emergency room care to get anti-biotics and that sort of thing. And since they are not part of the system and their employers completely ignore any health care benefits and things of that nature they do not carry out the required antibiotic regimen and do things like share the drugs with other infected people or only take the drugs until they feel better… we now have higher rates of TB and other highly infectious diseases in our intercities then what is found on the poorest third world nations… and not only that they are rapidly becoming drug resistant and virtually impossible to treat properly anymore.
You see the trick here is that if employers were actually required to document and import their workers legally then they would be forced to pay more taxes, provide housing, provide health care, have to deal with unions, proper worker environments, and will have people that won’t be scared to stand up for themselves.
So that is the game that is being played. The major corporate interests like illegal immigration since that means that they have access to work forces that are barely above slavery. The social engineering types like illegal immigration because that gives them a down-trodden work force that they can manipulate and use as political leverage to help forward their socialist agenda.
So both sides just avoid talking about the upsides and downsides and just work as hard as they can to prevent these people from ever becoming full-fledged citizens.
And it has nothing to do with Mexicans. These are the same issues that face any sort of foreign worker.
The real solution is to massively open up this country to proper legal immigrants who are actually interested in becoming full fledged citizens were businesses can bring them in and take care of them until they reach a level where they can become full members of our society while at the same time massively clamping down on illegal immigration; at the border, with government benefits, and in businesses.
Of course that is not going to happen since once you actually do something that will help solve the problem in a massive way people won’t have their political football and near-slavery workforce to kick around anymore.
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An adult of working age with some education and in good health represents an investment of hundreds of thousands of dollars, at least, by whatever country raised him, educated him, and got him to the US border. That investment is almost certainly a net positive to the US economy which can be seen as a transfer of wealth from the origin country to the US for each migrant.
It’s crazy to say no to this. You don’t want to say yes too fast, in case the US infrastructure is overwhelmed, but you should definitely not turn people away for economic reasons.
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I love the idea that an educated adult moving from one country to another represents a wealth transfer. Thanks for that.
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Or! We could all move to Chile:
$500,000 investment by the government over 5 years. Up to $30,000 in due diligence costs to explore setting up there. Up to $25,000 for training local talent. 40% (up to $2 million) to build office or labs there. If you give a foreigner a legit tech job, they get a visa without any bullshit. That all sounds pretty sweet.
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Great idea, but I would go even further than that. As a New Zealander, I would move to the US and work if I had permission to do so (though, marks off, I would want to live in California). I could go in the H1B lottery pool, but the documented abuse of that system to employ cheap labour means I would have a one in two chance at best.
So far, two other first-world, English-speaking countries (Canada and the UK) have issued me visas with comparatively little effort required, so I will improve their economies instead, I guess.
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I don’t know the specifics of the US situation, but here in Australia there is a similar attitude about immigrants (in particular refugees/asylum seekers who arrive by boat). It seems to be a growing isolationist trend.
There is a segment of the population who focus on the negatives: that they will take away jobs, that they will place a burden on the welfare safety net, that they might be terrorists, etc. Politicians and certain media outlets then cater to that segment which often makes things worse.
The policies also have the effect of making the country less inviting to the people who could improve out community (e.g. why would a qualified Indian doctor want to relocate to Australia if there are reports of Indian university students being beaten up?).
Miguel’s visa problem certainly sounds like the product of these sort of policies, and a “Startup Visa” sounds like an attempt to treat one of the symptoms rather than the root problem.
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Thanks for your thoughtful comment James. How would you suggest one might go about treating the root problem?
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Can’t see this as the right way of fighting poor immigration policy. Why would the government give an exemption to IT startups rather than any other type of economic activity? Only someone with a hugely exaggerated sense of their economic importance (e.g. Paul Graham) would suggest such whimsical legislation.
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Ben, what would you suggest as the right way to fighting poor immigration policy?
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Check out this BBC news article:
http://news.bbc.co.uk/2/hi/technology/8417510.stm
New visa proposal to help create the next big thing -
Hi Nat,
first of all I want to thank you for your interest and continued dedicated efforts. I am an Australian currently parked in Canada undergoing a lot of similar issues which I will make some time to write about for the first round startup visa thing now that I’ve just seen it
I also think it is just as much a responsibility for potential startup visa candidates/immigrants to care about and help fix the state of immigration abuse/cockblocks in the US since in the long run we’re all in the same boat. If you seek to become American, then it makes sense to help Americans, contrary to this whole care about yourself and your visa first (even if an American loses their job) attitude that I’ve seen from a lot of people.
The problem is that the H1-B is the only way, and everything gets funneled through their from companies who want to use it legitimately (especially smaller companies which NEED the help and talent and are hurt more if they cant get it) , to the body shops, to people who legitimately only want to work temporarily. It is unfair to put the whole category as a sham visa to be gamed, just as it is equally unfair and naive to say that everyone using it is using for the ‘intent’ of the visa.
H1-B really needs to be broken up and rethought, as does the whole system and immigration in general. Thank you for waving the flag for this part of it
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Not much to say or write, i support your cause…
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