Startup Visa Act Would Invite Foreign Investment in U.S.

Ann All

There's lots of bitter wrangling over the H-1B visa. Tech companies say they need more of them and many IT workers see them as a way for companies to drive down their labor costs while harming Ameriocan competitiveness in the process. My stance has always been that while I think the abuse in the program needs to be cleaned up, I do think there is a legitimate need for the visas. I think the annual cap should be a flexible one adjusted to reflect market need.


But I don't think the H-1B does anything to improve America's competitiveness by encouraging smart and ambitious foreign-born folks to settle here. For that, I think we'll need to make it easier for such folks to obtain green cards. With the H-1B, there's just too much uncertainty over long-term career prospects and too much control lies in the hands of sponsoring employers, at least some of which take advantage of H-1B workers because they can.


One thing everyone can agree on right now is the need for more jobs to be created in the United States. This country tends to attract immigrants with an entrepreneurial streak. A 2007 study by researchers from Duke University and University of California-Berkeley found 25 percent of technology and engineering startups in the United States were founded by immigrants. The number was higher in Silicon Valley, where 52 percent of startups had at least one foreign founder. So a push is not surprising for legislation that would modify the existing EB-5 visa to make it easier for foreign-born entrepreneurs with financial patrons to immigrate to the United States


According to eWEEK, the bill requires each entrepreneur to have a sponsoring U.S. venture capital or angel investor who will invest at least $100,000 in the startup, and total funds raised must be at least $250,000 per company. In addition, an immigrant entrepreneur must create five or more jobs (not including his or her children or spouse) within two years, attract an additional $1 million in investment or produce $1 million in revenues to become a legal resident.


I've written about the efforts of Cleveland and other economically ailing U.S. cities to promote foreign investment by being designated EB-5 regions.


Silicon Valley entrepreneurs and venture capitalists are lobbying for the the Startup Visa Act of 2010, sponsored by Sens. John Kerry, D-Mass., and Richard Lugar, R-Ind. More than 150 VCs from around the country have already endorsed the bill. Venture capitalist Dave McClure, organizer of a recent trip to the Capitol and a former software entrepreneur, calls the legislation "a huge win-win."

Proponents of the Startup Visa Act have also launched a social media campaign to promote it, which is described in this MercuryNews.com story. An anecdote in the story illustrates the need for such a visa. Brad Feld, a Boulder, Colo., entrepreneur and investor who runs a startup mentoring program called TechStars says he found that founders in two of the 10 companies accepted into TechStars in 2009 couldn't get visas to stay in the United States, and would likely go elsewhere to launch their companies. In a blog post, Feld wrote:


I cannot come up with a single reason why this makes any sense from a U.S. perspective. They are in the final process of raising their first rounds of financing. Post-financing they will be creating U.S.-based high-tech jobs. If they are successful, they will create a lot of jobs.


The MercuryNews.com's Chris O'Brien calls passing the bill "a no-brainer" and adds:

Even in the tortured politics of immigration, it's hard to imagine all but the most hard-core anti-immigrant activists opposing a bill that costs no money, takes no jobs away from people in the U.S., and rewards people who want to create jobs here.

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Add Comment      Leave a comment on this blog post
Mar 12, 2010 9:42 AM Non Starter Non Starter  says:

It is unrealistic to expect an immigrant who hasn't stayed here for a while and is quite unaware of the culture and business environment of this country to acquire a US sponsor of funds somehow and invest a large amount of his own money. This visa will be of no use to the vast majority of "real" entrepreneurs, and will end up being another sham misused by people with money and contacts.

Mar 12, 2010 11:28 AM Blue Blue  says:

This visa is a scam.  They tried to get it going in the UK, but when the government stipulated the 'start-up company' couldn't be an outsourcing company and had to hire locals the scammers fled.  That is very telling of the true intentions of this 'start-up' visa.   We don't need more outsourcing visas.  Tell your representative to oppose the 'start-up an outsourcing company' visa. 

Mar 12, 2010 11:33 AM Bob Bob  says: in response to Non Starter

I guess if the globalists can't increase the quota in one category of visas they'll just invent another gimmicky category of visas. This is a truley bird brained idea full of the usual "loop holes". First, where's the guarantee that the 5 employees hired would be American citizens? Chances are these new "companies" would just expedite the offshoring of US technology and jobs. Second, whose going to make sure the unsuccessful visa recipients leave the country, given USCIS does such a great job now? Finally, could we drop the obsession with foreign workers already? The underlying theme of this and other worker VISA expansion bills (besides cheaper labor) is that foreigners have this magical ability to create jobs and wealth that US citizens do not. That is quite an insulting notion, especially to anyone whose worked in technology fields who can attest that foreign workers by and large are not the collection of geniuses they are made out to be by Bill Gates and the mainstream media.  This bill is pure garbage.

Mar 12, 2010 6:13 PM Great Idea Great Idea  says:

Considering over a third of all startups are founded by immigrants, this visa makes a lot of sense.

Mar 12, 2010 6:30 PM R. Lawson R. Lawson  says:

In theory it sounds great.

In practice, it will be yet another example of how the worst in our country abuse the most vulnerable for profit.  The sad fact of the matter is that you can't mix big money and immigration.  Corporations simply are not to be trusted when it comes to administering something that I believe is sacrisanct.

Immigration should be about people seeking a brighter future in a country that championed democracy.  And that is all it should be about.  Keep big business and exploiters of immigrants out of the immigration process!

Mar 13, 2010 11:33 AM Common Sense Common Sense  says: in response to Great Idea

Anybody can START a business.  Take a good look at Silicon Valley now that they've all failed!

The startup visa will be as disastrous as Silicon Valley if India gets its way. 

Mar 13, 2010 5:55 PM Madia Madia  says: in response to Great Idea

Prove that statement please.   I would like to know how many startup - and successful businesses are started by ANY temporary visa holder and also your source.


No one here objects to someone getting a green card and becoming a US citizen - they are not the problem.  L1s, N1s, H1bs are.

Mar 13, 2010 7:05 PM M. G. M. G.  says:
  • Ann All: "I think the annual cap should be a flexible one adjusted to reflect market need."

So I'm sure you agree then that the annual caps for 2009 and 2010 should have been zero. Please come on the comments board and confirm that you agree with your own reasoning (and the reasoning of the tech industry lobbyists who are pushing this idea at you).

  • ComputerWorld, November 16 2009: "IT pay stagnates, workforce grows restless"


"salaries were flat" "bonuses were way down" "benefits were reduced or eliminated" "44% of respondents reported permanent layoffs at their companies"

  • Department for Professional Employees, AFL-CIO, 2009: "Gaming the System Guest Worker Visa Programs and Professional and Technical Workers in the U.S. ...


..."Claims of shortages necessitating these programs, especially in the STEM fields, have been widely disputed and are not borne out by basic economic indicators."

  • InformationWeek, March 12 2010: "Gates, Ellison Top Billionaires From Tech Industry"...


"Seventeen tech-industry executives made the new Forbes list of billionaires..."

Mar 15, 2010 11:44 AM WORLDMIKEL WORLDMIKEL  says:

Read the Startup Visa Bill. It is so vague you could do most anything with it. These Venture Capitalists have invested a lot through associations and their lobbyists. They are in the top 100 contributors of Kerry, Lugar and even Harry Reid. They've spread the wealth around. Check them out on opensecrets.org

Even if the Act were implemented as touted, it doesn't say anything about the 5 employees being Americans. Those 5 new "jobs" could be rigged so that only their foreigner buddies...er clients... would have the special skill necessary for the position.

The only thing spelled out in this Bill is the new special class of visa and that US Venture Capital will be invested in foreigners.

Why not let US Venture Capitalists invest in American "visionaries and entrepreneurs"? And to have some instant impact on our Economy, give out this special class of visa to foreigners that not only demonstrate their drive and ability to be recognized here in the US, but underscore it with solely foreign Venture Capital. Companies like Toyota, Hitachi, Nissan and others invest in the US and their people. This has a positive effect on the Economy. Their employees live and spend here. Those companies employ Americans in great numbers. China is sitting on $1-trillion+ US money. They can't find anything that we have (that they want) to spend it on. Here would be the opportunity. Let China, India, Canada, Eritrea or whoever send their brainiest to the good ol' Silicon Valley to be close to their brethren in the field and send along the loot they need to thrive. That is a win-win situation. The Startup Visa Bill as it stands is a sham and front for a bunch of monkey business that will bite us in the ass multiple times.

Tell them to DUMP the Startup Visa Bill.

Follow the trend on Twitter and add to it: #StartupVisa

Apr 4, 2010 4:42 PM Ron Ron  says:

And then they will let these new generation of Green Card holder suffer and live a life of prisoner just like 1.5 million are doing so right now. And most of these 1.5 million made huge contribution to the US by working for Intel, IBM, NASA, Pfzer... just to know that they will be deceived and treated as a robotic labor and will be banned to be with their families:

Read here: http://www.unitefamilies.org/


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