An 'entrepreneur’ visa may be a good idea
Friday, August 19, 2016
Earlier this year, the National Foundation for American Policy published a study revealing that, of the 87 privately-held, U.S. startups with valuations of at least $1 billion (Uber, CloudFlare, SpaceX, e.g.), more than half were founded or co-founded by immigrants. Foreign-born executives and scientists play key roles in more than 70 percent of these billion-dollar companies, whimsically dubbed ‘unicorns’ by venture capitalists. Collectively, these start-ups have added more than 65,000 jobs to the United States’ economy.
Ironically, once they start their companies, many foreign-born entrepreneurs don’t know how long they’ll be able to stay in the United States, if at all. More troubling still is that a majority of these immigrant job-creators received their educations in the U.S. For every unicorn out there, there are dozens of other immigrant-founded companies that have also created thousands more jobs. And these entrepreneurs are in the same immigration quandary as their unicorn-founding counterparts.
The problem is the current H-1B visa program. With its strict annual quotas and random lottery implemented when the quota is reached within the first 5 business days of a fiscal year, the current system could deny the founder of a billion-dollar U.S. company – or a firm on its way to a $1 billion valuation — the right to work in the United States. In one instance, Michelle Zatlyn, CloudFlare co-founder and chief of user experience, was initially denied and H-1B visa and was ordered to return to Canada. Moreover, newer, smaller firms may have difficulty competing with more-established, bigger companies due to the expenses involved in sponsoring highly-talented employees. Each H-1B visa petition costs thousands of dollars, with no guarantee of success.
The E-2, or “investor,” visa is a potential choice for entrepreneurs wishing to base their companies in the United States. However, it is a treaty-based visa, which means a potential visa holder must be from a nation that has signed the treaty. Additional limitations include a substantial financial investment and at least 50 percent ownership of the U.S.-based startup. Thus, the E-2 visa is only feasible in limited circumstances.
In the face of a shrinking STEMM (science, technology, engineering, math and medical) talent pool in the U.S., immigration challenges create a chilling effect both for highly talented immigrants wishing to work in the United States and the companies wishing to hire them. After graduating from an American university, a U.S.-trained immigrant must weigh the costs and creativity-siphoning distractions of immigration concerns against simply packing up and using their training and talent in another country.
Given the success and proliferation of tech startups over the last two decades, perhaps it’s time to rethink the visa system beyond the current, existing classes. If a foreign-born individual is a founder and executive of a successful start-up that has created U.S. jobs, paying federal and state taxes, such an entrepreneur should be able to continue her work in the United States.
With appropriate guidelines to prevent abuse and fraud, an entrepreneurship visa would be self-limiting, simply based on guidelines such as the number of jobs created and minimum valuation of the firm. The foreign-born individual should also be able to demonstrate that he plays a key role in the company’s daily operations.
It only makes sense that if the current system cannot automatically accommodate U.S.-educated, foreign-born job creators who supercharge the United States’ economy, something entirely different must be done. An ‘entrepreneur’ visa may be one step toward a solving the problem of talent attrition in the U.S.