Immigration and the Startup Visa

A few weeks ago, I was at a Georgia Tech student event, the Convergence Innovation Competition. I was incredibly impressed by the quality of the student entrepreneurs. They were mostly Master’s candidates in Computing or Electrical Engineering,

While still at the competition, I tweeted:

Of the first 28 student entrepreneurs I’ve met in this competition so far, 2 of them were born in USA. Our immigration policy has to change!

Exactly 140 characters (the Twitter maximum), but it triggered a number of public posts, private messages, and face-to-face conversations over the next week or so. And, for unrelated reasons, I’ve wound up having variations on the same discussion with different audiences for the last two months. So I figured it was time for a blog post on the topic.

First off, some people misunderstood my comment as being anti-immigrant or anti-immigration. Nothing could be further from the truth. Heck, I married an immigrant!

Immigrants bring brainpower, ambition, and energy that our country desperately needs. (Our K-12 school system seems to be doing its best to destroy those same characteristics in the children who are born in this country, but that’s a different blog post.) And the willingness to pack your bags and move to a different country for graduate school is a pretty good filter for whether a young person has what it takes to start a company. Over half of the startups in Silicon Valley have a founder from India or China.

No, my tweet wasn’t about changing our laws to restrict immigration. It was stating that our policy has to change to allow these students to stay here! The United States has the best graduate schools in the world. We attract Master’s and Ph.D. candidates from all over the world. And, under current law, once we grant them a degree, they have one of two choices: they can get a job with a company big enough to sponsor them for a green card, or they can go back to their home country.

As a national immigration policy, that’s insane.

(I’m oversimplifying. There’s something called “Optional Practical Training” that can extend a student visa for a year or so of work experience, but there are a lot of hoops to jump through, and you can’t use OPT to start a company. And there are a limited number of H-1B visas out there, but they have layers of restrictions, and you still need a sponsoring company. And, even if you follow all those avenues, you eventually still have to find a green card sponsor or go home.)

Now, big companies like Coca-Cola or Cisco or Monsanto have whole legal departments to help their employees navigate the shoals of the US Citizenship and Immigration Services. My wife got her green card through IBM when she chose to move here from IBM Brazil. And a graduate can build a great career going from OPT to H-1B (or L-1; that’s different) to green card to U.S. citizenship while working for a multinational in the United States.

But what if you want to start a company?

Sorry, you’re out of luck. USCIS doesn’t recognize self-employment. And even if you aren’t going to be the founder, but just an early employee of someone else’s company, most startups can’t afford the legal services and fees to get you an H-1B visa, much less a green card.

So, even though young companies have accounted for essentially all the job growth in the United States over the last twenty-five years, our immigration policy doesn’t encourage foreign graduate students to participate in that job creation. Work for a big company, or go home. (And, more than likely, start a company in India or China to compete with U.S. companies.)

John Doerr, one of the most successful venture capitalists in history, said “I would staple a green card to the diploma of anyone that graduates with a degree in the physical sciences or engineering in the United States.” He’s absolutely right. These people are going to create value. Create jobs. Pay taxes, for crying out loud! Why would we not want them to stay here? Marry, raise families, buy a houseboat on the lake… the economic multipliers are endless.

But “immigration policy” has been hijacked by demagogues of both parties. Republicans rail against illegal immigrants as lawbreakers who must be punished and deported before they have “anchor babies”—children born on American soil with birthright citizenship. Democrats see undocumented workers as a vast new source of potential voters who are doing jobs “Americans just won’t do.” Both find reasons to vilify any measure labelled “immigration reform.”

There’s a valid debate to be had in this country over the right mix of open borders and social services. But that’s a completely different issue than sending back a brightly-minted Ph.D. graduate because he or she doesn’t have the right visa to start a company. Can we agree that a computer science Ph.D. from Georgia Tech is not likely to have swum the Rio Grande under cover of nightfall?

The other issue that has been raised in my conversations on this issue is that “they’re taking jobs from Americans.” That’s nonsense. These young immigrants are going to create jobs… first for themselves, then for co-founders, and eventually—if successful—for hundreds or thousands of employees. It’s not a zero-sum game. If these immigrants aren’t allowed to create jobs, those jobs won’t go to native-born Americans… those jobs simply won’t exist.

(And these aren’t jobs flipping burgers or picking crops. These are high-quality high-paying jobs that your kids would like to have someday. As a bit of history, not just Google, but Pfizer, Intel, DuPont, U.S. Steel, and Procter & Gamble were once startups founded by immigrants.)

Our policy is insane. And it may be too late to do anything about it. India and China have embraced the “reverse brain drain” and many foreign students want to go home to start companies… only a few years ago, almost all would have preferred to stay.

But there is a movement to create a startup visa. Championed by Vivek Wadwha and publicized at http://www.startupvisa.com, there is legislation in Congress to issue new EB-6 work visas to entrepreneurs who can demonstrate traction with angel or venture capital investors.

The bill isn’t perfect. There’s an annual cap on the number of EB-6 visas. And the visas are time-limited, unlike green cards. But it’s a start.

It’s a cliché to say that “the United States was built by immigrants.” It’s also true. We have the world’s best graduate schools and research institutions; other countries are catching up, but we started from far ahead. We have a history of risk-taking, of capital fluidity, and of tolerance of failure that has made the U.S. the best place in the world to start a company. Other countries are catching up here, too, but our culture and history give us an edge. Even with our current financial woes, I believe that we’re still the entrepreneurial Mecca for the world.

But we have to make sure that we attract the best, brightest, and most innovative entrepreneurs, whether they were born here or not. The Startup Visa Act would be a huge step in the right direction.