Who doesn’t like a venture-backed entrepreneur that wants to start a company right here in the good old USA?
Who would be against the creation of new industries and new jobs for Americans?
Well, we are soon going to find out.
Yesterday, Senators Kerry and Luger introduced an immigration bill to grant status to foreign-born venture-backed entrepreneurs that want to start a company in America. This follows a similar bill submitted in the House by Jared Polis from Colorado.
They are calling it the Startup Visa. Since nearly all of the net job creation in the past twenty years comes from companies less than 5 years old, the Startup Visa should be something to help turbo-charge American entrepreneurship and get our juices flowing again.
As America is crying for innovative and budget-conscious acts by Washington to jumpstart the economy and create jobs, I can almost hear Mick Jagger singing “Start Me Up” as the soundtrack for Senator Luger’s Press Release:
Kerry-Lugar Visa Bill Will Create Jobs in America
Wednesday, February 24, 2010
WASHINGTON, D.C. – Senators John Kerry (D-Mass.) and Richard Lugar (R-Ind.), the Chairman and Ranking Member of the Senate Foreign Relations Committee, today introduced legislation to drive job creation and increase America’s global competiveness by helping immigrant entrepreneurs secure visas to the United States.
The StartUp Visa Act of 2010 will allow an immigrant entrepreneur to receive a two year visa if he or she can show that a qualified U.S. investor is willing to dedicate a significant sum – a minimum of $250,000 – to the immigrant’s startup venture.
“Global competition for talent and investment grows more intense daily and the United States must step up or be left behind,” said Sen. Kerry. “Everywhere Dick Lugar and I travel for the Foreign Relations Committee, we see firsthand the entrepreneurial spirit driving the economies of our competitors. Creating a new magnet for innovations and innovators to come to the United States and create jobs here will offer our economy a double shot in the arm – robust job creation at home and reaffirmation that we’re the world’s best place to do business.”
“Our country should strive to attract to the United States the most talented and highly skilled entrepreneurs. We should channel the power of innovative thinkers from around the world and American investors towards creating jobs and encouraging economic growth and future prosperity,” said Ranking Member Lugar.
The StartUp Visa Act of 2010 would amend immigration law to create a new EB-6 category for immigrant entrepreneurs, drawing from existing visas under the EB-5 category, which permits foreign nationals who invest at least $1 million into the U.S., and thereby create ten jobs, to obtain a green card. After proving that he or she has secured initial investment capital and if, after two years, the immigrant entrepreneur can show that he or she has generated at least five full-time jobs in the United States, attracted $1 million in additional investment capital or achieved $1 million in revenue, then he or she would receive permanent legal resident status.
More than 160 venture capitalists from across the country have endorsed the senators’ proposal. That letter of support is attached
It is interesting to see that some in Congress are not afraid to acknowledge that innovation, job-creation, and American technology leadership depends on our ability to attract and retain the world’s best, brightest, and most entrepreneurial.
But really is fascinating is how the Startup Movement began with some venture capitalists like Brad Feld, Mike Speiser and others, who became frustrated with an antiquated immigration system that bears little connection to the demands of the New Economy.
They saw numerous examples of international students, or H1B professional workers, or inventors overseas who had great technology or ideas for a new business, but couldn’t secure immigration status to make it happen in America. As opportunities continue to expand in China and India, more and more internationals were giving up on the U.S. and going back home to test out their business idea.
It has been well-documented by Vivek Wadhwa and others that we are experiencing the first brain drain in U.S. history. http://www.businessweek.com/technology/content/dec2009/tc2009121_842902.htm
So Feld and company came up with the Startup Visa concept, and began building grassroots support around the country, using the web ( http://startupvisa.com/ ), twitter, and other social networking platforms. The group is also not afraid to take a few trips to D.C. to make their point face-to-face.
This is an inflection point in the immigration reform debate. The entrepreneurs and the people behind the entrepreneurs are beginning to make their voices heard. They need to tell their story to America and explain how the word “immigrant” can mean “job-creator.”
When the venture capitalists speak, everyone listens. Or at least they should listen. They are the talent scouts, the explorers, on perpetual mission to find the next big idea, the next Google, Intel, or Sun Microsystem. They provide more than just money: they provide the coaching, the networking and the helpful early management to get an idea to market and grow.
Take a listen to what some of the biggest VCs are saying about immigrant talent & entrepreneurship:
Michael Moritz/Sequoia
Is not fluke that Seqoia has backed many other immigrant-founded companies, including Google, Yahoo, Paypal, YouTube, LinkinIn, Nvidia, a123systems, and others.
In fact, the website for Sequoia proudly proclaims their attraction to immigrant newcomers:
“UNDERDOGS. The collision of intelligence and ambition with opportunity is unbeatable. Almost everyone we have ever invested in has been a complete unknown at the time we met. Many have been immigrants or first generation Americans with barely a penny to their name. Underdogs are our favorite kind of people.”
Sequoia’s Michael Moritz, a former board member of Google with a net worth reported at over $1 billion and listed as one of Time’s most influential 100 people in the world, has written:
“An entrepreneur without passion is an empty vessel. Anyone who starts a business — and wants it to last — needs this quality. It is a journey against all odds. Every business starts with one or two people, an idea and nothing else — no employees, no money, no product, no customers and no shareholders….Force venture capitalists to choose between a well-heeled Ivy League student and a smart and impoverished immigrant, and we’ll pick the latter every time. The lily-livered need not apply for a life at a start-up. Tenacity is a necessity.”
In 2007, before the Cardiff Business Club in his native Wales, Moritz had this to about immigration restrictions of high-skilled talent:
“It’s no coincidence. You go around most of these companies and….all of the founders and very early employees are either an immigrant or a first-generation American. That has been the fuel that has propelled these companies”
——————
John Doerr, Partner, Kleiner Perkins
Billionaire, investor in immigrant founded companies: Google, Sun Microsystem
The day after Barack Obama was elected president of the United States, VC John Doer was asked this question at the Web 2.0 Summit in San Francisco:
“What should the new Chief Technology Officer of the U.S. Government do?”
Doer responded with his immigration reform mantra:
“staple a green card to the diploma” of any international student graduating from a U.S. university with a degree in engineering.
Vinod Khosla, Khosla Ventures, former General Partner Kleiner & Perkins, co-founder Sun Microsystems, billionaire, a founder of TiE
“How many jobs have entrepreneurs, Indian entrepreneurs, in Silicon Valley created over the last 15, 20 years? Hundreds of thousands I would guess.” Vinod Kholsa in CBS news.
Guy Kawasaki, is a managing director of Garage Technology Ventures, an early-stage venture capital firm and an author. From his blog: How to Change the World: A practical blog for impractical people
“How to Kick Silicon Valley’s Butt:
Encourage immigration: I am a third-generation Japanese American. My family moved here to drive a taxi and clean white people’s homes. If I had a choice between funding someone from a family who moved here from Vietnam whose father and mother run a 7-Eleven verses a descendant of a Mayflower passenger with “IV” in his name, I’ll give you half a guess as to my preference. You need to encourage smart, hungry, and aggressive people to immigrate from around the world. Add to do that, you need good schools. To mix several metaphors, if you want to cover your ass, you need to open your kimono because trust fund kids don’t make good entrepreneurs.”
In 2006, the National Venture Capital Association, which represents the people and firms that invest in young, risky, fast-growing companies, put hard data to these observations. It sponsored a deep look at the kinds of people its members were bankrolling and published its findings in a report titled, “American Made: the Impact of Immigrant Entrepreneurs and Professionals on U.S. Competitiveness.”
And what an impact. Looking at businesses launched between 1990 and 2005 with money from venture capitalists, the researcher concluded that immigrants were behind one-fourth of all public venture-backed companies created in America. Add a high technology label, and the immigrant share soars to 40%. The study showed that the market capitalization of U.S. public companes that were founded by immigrants and backed by venture capital was $500 billion.
Some of those immigrants founded companies that became icons of the New Economy:
Sergey Brin, a founder of Google, immigrated from Russia;
Vinod Khosla, a co-founder of Sun Microsystems, was born in India. His partner, Andy von Bechtelsheim, came from Germany.
Pierre Omidyar, the founder of eBay, was born in France to Iranian immigrants.;
Andy Grove, a founder of Intel, immigrated from Hungary.
Jerry Yang, c0-founder of Yahoo, came to America from Taiwan.
Elon Musk came to America from South Africa and later co-founded PayPal.
Those are just the rock stars of the New Economy. In companies small and large, some famous and some you’ve never heard of, immigrants are often the ones pushing the envelope, introducing ideas, defining the state of the art and creating new industries and jobs.
Perhaps venture capitalists who are also immigrants possess keener insight into the immigrant advantage.
Six out of the top Vcs on the 2009 Forbes Midas List of top 100 Vc’s are immigrants, including Moritz at #2, and fellow early Google funders David Cheritan, Andreas von Bechtolsheim and Ram Shriram.
Big companies start out as small companies. If Congress and the President follow the advice of the VCs, maybe some of the Startup Visa holders will turn out like some of America’s earliest immigrants who founded icons such as DuPont, Pfizer, Dow Chemical, Procter & Gamble, Levi Jeans, and U.S. Steel.
The VCs are willing to bet on it.
Sure Americans may not like to hear that immigrants are nearly twice as likely to start a business and be granted a patent, more likely to hold an advanced degree, and that 50% of the tech companies in Silicon Valley were founded by immigrants.
But isn’t it time that we got over the insecurity of our own deficits, and learn to partner with foreign-born entrepreneurs and innovators to usher in a stronger America?
For more on the Start Up Visa see:
Why the current system does not work:
http://www.edn.com/article/CA6719312.html
Hear from Brad Feld and Mike Speiser, venture capitalists and co-founder of the startup visa proposal:
http://www.technologyreview.com/blog/post.aspx?bid=358&bpid=24854
http://gigaom.com/2009/07/04/americas-secret-innovation-weapon-immigration/
Check out the National Venture Capital Associations take on the startup visa:
Great post! I am an immigrant entrepreneur working against all odds. Hope this visa is enacted soon.