Bloomberg BusinessWeek: Let's Give Visas to Startup Founders
Bring up the topic of economic stimulus and job creation, and you won't hear much about immigration. If the topic does arise, it's usually because somebody believes foreigners are taking U.S. jobs. It's time to bring the immigration question squarely into the debate over jobs. A change to immigration policy could help create jobs and rev up economic growth. It's a change that wouldn't be hard to bring about.
I'm talking about the establishment of a Startup Founders Visa program. The program would make it easier for those with great ideas and the desire to start a company to live and work in the U.S. The idea is simple, yet powerful. By letting in company founders, the U.S. would bring in risk-takers who want to create jobs and potentially build the next Google, Cisco Systems, or Microsoft.
At the same time, a founder visa program could stem the tide of talented, tech-savvy foreigners who are leaving the U.S. to seek fortunes in their home countries, primarily China and India. Even foes of flexible immigration policies who rail against both skilled and unskilled immigrants may have a hard time finding fault with granting visas to startup founders.
Required: Early Investor Backing
This type of program has been championed by a long list of technology notables and entrepreneurship gurus, including venture capitalists Brad Feld, a managing director at Mobius Venture Capital, Paul Graham, a partner at early-stage venture firm Y Combinator, and technology startup experts Eric Ries and Dave McClure. This idea was originally conceived last year by Robert Litan, the Kaufmann Foundation's vice-president of research.
Here's how it would work. Suppose a talented engineer who is not a U.S. citizen has a great idea for a new type of search engine and wants to start a company. This entrepreneur wants to start that company in the U.S., where venture capital markets are the most mature, intellectual property laws are strong, and the talent level is high. It turns out that the would-be founder's search engine idea is actually very good. So a qualified U.S. investor decides to put real money—say, $250,000 to $500,000—into the startup. That investor could nominate the potential founder for a Founders Visa while also making a formal commitment to fund his or her company. The idea and the founder's résumé would then need to pass muster with a government or industry-appointed board of venture capitalists, financiers, or technology experts. After passing, the founder would be granted a permanent resident visa.
To open up visa slots, Ries, Feld and others propose altering an existing visa known as the EB-5, now for immigrant investors. Created by the Immigration Act of 1990, the EB-5 lets foreign nationals who invest at least $1 million in the U.S., and thereby create 10 jobs, obtain a green card. In areas where unemployment is high, foreign nationals need only invest $500,000 to obtain residency. By adding a Founders Visa provision such as that I have outlined to the EB-5 visa, we could avoid having to create a new class of visas and any political hassles this might entail.
Newt Gingrich Likes the Idea
Richard Herman, a Cleveland-based immigration attorney and co-author of the upcoming book Immigrant, Inc.—Why Immigrant Entrepreneurs Are Driving the New Economy (and how they will save the American worker), says that allowing thousands of founders to get special immigration status could spur sufficient economic activity and innovation to realize billions of dollars in real economic gains for this country within a short time span. We're talking years, not decades.
How palatable would such a program be politically? U.S. Representative Jared Polis (D-Colo.), himself a former entrepreneur, is developing legislation to make it easier for foreign founders of investor-backed startups to secure visas to remain in the U.S. On the other end of the political spectrum, even Newt Gingrich, the Republican former Speaker of the House, has blogged about the need to make the country "more accessible to skilled immigrants." He wrote this after witnessing "the dynamic entrepreneurial and high-tech business culture in Tokyo, Beijing, and Seoul"—countries with which we are competing for top talent. Representatives of both ends of the political spectrum can agree on this issue.
As things stand, we're losing the battle to retain the immigrants who fueled the recent tech boom. We're experiencing the first brain drain in American history. Other countries in Europe and South America are realizing the potential of attracting skilled immigrants and are putting together programs to snap them up. The startups needed to boost our economy are being created in Shanghai and Bangalore. That's great for those countries, but we need job creation in Silicon Valley in California and Research Triangle Park in North Carolina. That means warmly welcoming to America as many founders as we can.