I'm surprised to see otherwise smart people treating this idea seriously. Consider just the following:
- the whole point of startups is to test high-risk ideas in the crucible of the market. This approach promotes highly risk-averse behavior (since the penalty for failure is getting expelled from the country, along with your family).
- you're replacing a market test with bureaucratic criteria. What does it mean to create five full-time jobs? Can I hire five people the week before the deadline? Can I fire them the week after?
- The proposal badly skews the relationship between investor and entrepreneur. Since the entrepreneur's immigration status is conditional on receiving funding, the investor has essentially received a free subsidy from the government, and holds all the cards in the relationship.
- Competitors without startup visa founders know what targets the startup must meet, and can undercut them in order to sabotage their ability to meet the visa test.
I'm sure others can think of many ways this system can be gamed. The more philosophical objection is that the proposal runs against the basic ideas of a startup - high-risk, high-reward activity, low bureaucratic overhead, a tolerance for repeated failure, and the market as the ultimate arbiter of success.
The bill is well-intentioned, but displays a striking level of naivete with regard to people's behavior, and a blithe disregard for the pressures around obtaining and keeping legal residency.
The right way to achieve these goals is through comprehensive immigration reform that makes it easier to work legally in the country, acknowledging the economic contribution of millions of undocumented immigrants at every level of the economic ladder.
Any system will be gamed. The question is whether or not it is preferable to push startups that would be founded out of the country, or destroy them. None of your arguments describe why the startup visa is a worse idea than the status quo.
I know literally dozens of foreign residents, working at tech companies, who would love to create a startup here in the SF Bay -- here particularly in the SF Bay, which has advantages and friends of theirs and frankly should be their prerogative, but cannot legally do so because of visa restrictions. This actually kills those startups outright.
As for the remaining very important portion of immigration reform that needs to happen, I am not sure that as a country the US can get over its xenophobia enough to change soon.
The time is right to make it easier to start companies: we're still in a recession, the political winds are in our favor.
I know literally dozens of foreign residents, working at tech companies,
who would love to create a startup here in the SF Bay ...
but cannot legally do so because of visa restrictions.
Next you meet them, ask why they are under "visa restrictions". It's highly likely it's because of the current broken immigration system. It takes 6-10 years to get a green card (with practically no job mobility during that time).
Which is precisely what the comprehensive immigration reform that the parent called for will fix.
Second, the startup visa is still a visa. They will still have "visa restrictions". It's highly likely to have restrictions against bailing from the startup you were "authorized" to start and joining another startup or becoming an employee at a company.
Just two administrative changes will go a long way.
1. strictly FIFO processing of applications on a nationwide basis (currently applicants for green cards in regions with a large number of applicants such as California can be processed slower than other regions)
2. Reform the green card process so that job mobility is available when green card app is in progress but not yet approved. This includes formalizing a "grace period" during which time you can remain unemployed without losing visa status or your place in the green card queue (but not be uninsured, collecting govt. aid etc; most immigrants whom this will help save a lot so money is not a problem for them)
I'm not going to start a company in a country where my residence permit is conditional on factors beyond my control. That is exactly the kind of arbitrary constraints that makes me not want to spend my career in a big-co.
If it's just me, maybe. But I could be bringing a spouse, and there might be a child in play - and at any given time, if my company fails, I could be given two weeks to leave the country permanently?
If you want me, I'll come. I'll sign any number of pledges to never burden any welfare budgets, or be convicted of felonies. I'll pay my taxes, and accept it if I can't vote. But I won't compromise on permanent residence.
I'm sorry to say this, but the life of your company, and by proxy your residence, is always subject to factors beyond your control -- random disruptions you need to get around. You could be hit by a bus. It's not all that uncommon. These constraints are a matter of degree.
Getting deported because your business failed to meet an earnings goal is not a random disruption, and it's pretty un-American to boot.
We have laws that let you keep your home in the event of bankruptcy for exactly this reason - the understanding that failure in business should not force you to uproot your family, which is what this bill proposes.
Absolutely; I don't assert that being kicked out is a good thing, but it's likely a requirement for the bill to pass, and the relevant effected parties would, like me, prefer to be able to choose. This is just one more slightly less risky channel through which entrepreneurs, if they accept the risks, can travel.
You would deny them this because you wouldn't be willing to take those risks yourself? It's that which seems unamerican.
You can't have it both ways. In one breath you want to welcome highly-qualified people to start companies. In the next, you dismiss the concerns of such people about having to leave in two weeks if the business fails after two years without being given an opportunity to reboot with a glib comparison to getting hit by a bus.
Hint: chance of business failing is (thankfully) much higher than getting hit by a bus.
I don't dismiss these concerns: I've lived them. I spent months contracting for a little startup helping them out for a little pay so that I could try to plant the seeds for my own startup so that it would look legitimate enough to the immigration people that I could get a visa for it. It's risky and scary and tenuous, and it's hard work, and I didn't have a home at the time, either: I couch surfed with a variety of very generous friends.
My point is that there are certain risks one can take on the way to success. I'm not arguing that these risks shouldn't be mitigated, I'm saying that you, personally, shouldn't consider them as different in kind of the other risks that you face as an entrepreneur. Such limitations are too easily transformed into excuses.
Canada finally fixed their laws to make it easy for US-based VCs to invest up there. Couple that with the pretty easy visa requirements for people with technical degrees, and we should see a flock of serious startup entrepreneurs moving to Vancouver and Toronto.
The startup scene in Vancouver is horrible. I can't imagine any entrepreneurs moving there to start a company when Seattle is so close. The talent, the market, and the community are infinitely better in Seattle than Vancouver.
Combine that with the exorbitant cost of living and it's a no brainer.
I'm from Vietnam and we don't have a good and friendly startup culture here. In fact, it's pretty harsh here, entrepreneurs have to face so many constraints outside their control like government policy, corruption, politics, no support from the community, no angel funds etc .. this is not good for the morale, but we know what we have to do to overcome this, bootstrapping is the only option now, we hope that after gaining the startup momentum, we can move our startup to some other places to continue our dream.
No offense but that's exactly why Vietnam (and countless other places) are suboptimal for startups. As soon as people make a mark they jump ship and take with them their knowledge and ability to attract investment. Why don't you become a success AND stay in Vietnam. Help develop a startup culture and educate investors. I'm doing the same thing in Thailand. Feel free to contact me if you want to chat about anything matthew [@] jukaroo [.] com.
I think Thailand and Vietnam have many things in common regarding the startup culture, you were right mentioning that we can stay in Vietnam and be a success, actually, that's what we always wanted to do. The point here is that most people in Vietnam don't give entrepreneurs enough respect, and being an entrepreneur here means you have to bear a great cost of being seen as "jobless", and in my country, being "jobless" is the next worst thing to being a criminal (Actually my girlfriend just left me because I don't have a job, her family rejected me because I don't have a job).
When you go to VC (we have IDG venture fund here, they're the only one fund in tech) to sell your idea, they'll ask you about things like IPs, proven business model, stats about market size, market trends, demographic view and yes, they look at your background carefully, ironically, if you're a businessman with 15 year experience in business and tech and the like and can come up with the "great" idea like Facebook clone (http://bit.ly/c21XyJ) or Linkedin clone (http://bit.ly/96o8lm), chances are high that you'll get the investment. Having relations with government officials is also important here if you want to survive in the long run, especially when it comes to sensitive things like Internet related services like social network or social news ... So, when it comes to new product in new and untested market, you have to do it on your own with your own budget, test and learn. I see many friends of mine gave up their startup dream because they don't have enough support. It's a sad thing, and this must be fixed soon.We want to prove that this is the wrong thing
The Startup Visa is the most ridiculous idea ever, as I've been telling and will continue to.
Instead of backing a stupid legislation to bring founders to the US, investors should travel the world and fund startups in other countries. There is nearly nothing one can do when starting up in the States than anywhere else.
The immigration problems for entrepreneurs is shared by practically every nation I've looked into. It is a local industry with local advantages and global consequences. The only place I found that seemed somewhat better was my home country of Canada, which I strongly considered but ultimately declined to operate in. There's a greater pool of technical talent living in the USA than anywhere, (except perhaps the EU, which is nearly impossible to get into as an entrepreneur who's a non-citizen), there's easier access to funding -- and in particular smart money (which if you listen well is a lot more valuable than dumb money), world-class universities, and better weather than Canada. I could go on.
So it makes sense to improve immigration from an entrepreneurs standpoint.
And there's a good argument it makes sense to improve it from the government's standpoint.
And there's a good argument that it makes sense from the VC's standpoint.
The only good arguments against the startup visa that I've heard are that in its current incarnation it displaces the H1B queue, which is way too long already. Furthermore, it isn't the overarching immigration reform that the country will eventually need. I don't know what the best approach would be to put large scale immigration reform in, but I really doubt that a recession is the time...
One of the common exceptions to "nearly nothing" is establishing a legal business quickly and cheaply.
How about the need for cheap and reliable electricity? In plenty of places you have to budget for a serious UPS plus generator setup.
Rule of law, in a reasonable time frame?
Heck, until very recently it was impractical for a foreign VC firm to invest in Canada.
Anyway, the existence of Silicon Valley, it's much smaller brother in the Boston area, and the pale shadows of those two in the rest of the country suggests that while one "can do" a startup elsewhere there seem to be location specific competitive advances.
Those are solvable problems, and it's not like you can never be in SF just because you're based elsewhere in the world ... it's only a plane or two when you're physically needed there.
There are negatives to being in SF or the states as well ... you can hire a team in some parts of the world for less than you'll rent space in SF.
What are the things you and your startup needs on a daily basis that you can only get in SF / the USA?
"it's only a plane or two when you're physically needed there"
That's assuming you're from a visa waiver country. If you're from anywhere outside Western Europe, Japan or Australia/NZ, getting into the US is a hassle.
That's true and it's a valid point, but when you're from a non-waiver country the US embassies look for reasons you'll leave the states and your business is going to contribute to the list of reasons you'll come back. Certainly there's no guarantee though that some people will ever get into the US.
My point really is what on-going reasons are there to be based in the states or specifically SF ... most of the time you're not going to be meeting with investors or other entrepreneurs or hiring, you're just going to be working and that part can be done anywhere.
Mostly I meant that the friction of obtaining a visa makes it inconvenient to make any trip on short notice, whether to meet investors, attend a conference, or meet with potential partners.
The inconvenience is mostly for the investors, who would then have to travel to other countries. So, does that mean that the US is about to set legislation based on the inconvenience for a bunch of VCs? :-o
I hope they are serious about it.
I am Egyptian, and I lost a funding opportunity because of a visa refusal.
But what is worse is.. that at the American embassy, they did not understand what does a startup means :S
What I personally think is most exciting if this gets adopted, is not the bill itself but that US "hackers" see that they can influence politics. I've always been impressed that you, even early on, had organizations like the Electronic Frontier Foundation, the Free Software Foundation and Creative Commons. But when you talk with Americans today in regards to things like the Pirate Party, you're mostly meet with overall disappointment over the US political system. So hopefully you now get the chance to find a different way to do something similar.
Edit: If there isn't already one, someone should make a site for forming and joining interest groups.
> US "hackers" see that they can influence politics.
Err... the ones pushing this through are VC's, who are, pretty much by definition, a fairly well to do group. Closer to hackers than, say, Warren Buffet, probably, but still, not quite the same thing.
That's awesome, getting downvoted and commented on for the one word I put inside quotation marks. I was referring to hackers as in Hacker News i.e. the "startup community". Also it's pretty much impossible to do anything political, especially in the US, without the help of influential people. I could tell you the details of how it's done over here, but something tells me you're not interested.
I didn't downvote you, and I commented because, well, I think you were to some degree wrong (but not wrong in a bad, downvotable way, just incorrect). The "startup community" is not what is driving this bill, it's the VC's.
- the whole point of startups is to test high-risk ideas in the crucible of the market. This approach promotes highly risk-averse behavior (since the penalty for failure is getting expelled from the country, along with your family).
- you're replacing a market test with bureaucratic criteria. What does it mean to create five full-time jobs? Can I hire five people the week before the deadline? Can I fire them the week after?
- The proposal badly skews the relationship between investor and entrepreneur. Since the entrepreneur's immigration status is conditional on receiving funding, the investor has essentially received a free subsidy from the government, and holds all the cards in the relationship.
- Competitors without startup visa founders know what targets the startup must meet, and can undercut them in order to sabotage their ability to meet the visa test.
I'm sure others can think of many ways this system can be gamed. The more philosophical objection is that the proposal runs against the basic ideas of a startup - high-risk, high-reward activity, low bureaucratic overhead, a tolerance for repeated failure, and the market as the ultimate arbiter of success.
The bill is well-intentioned, but displays a striking level of naivete with regard to people's behavior, and a blithe disregard for the pressures around obtaining and keeping legal residency.
The right way to achieve these goals is through comprehensive immigration reform that makes it easier to work legally in the country, acknowledging the economic contribution of millions of undocumented immigrants at every level of the economic ladder.