Time For A Startup Founder Visa
from the let-'em-in! dept
In our various debates about immigration policy in the US, we here have always been in favor of a much more permissive immigration policy for skilled immigrants, noting that skilled immigrants have been shown to create more jobs rather than “take them away.” For some reason, too many folks incorrectly think that jobs are a zero-sum game, and if a foreigner takes a job, it means one fewer job for Americans. That’s wrong in so many ways that it’s difficult to take seriously anyone who makes such a claim. That said, it would be interesting to see what even those opposed to expansions of existing skilled worker immigration plans think about Paul Graham’s new suggestion of a special startup founder visa, that would allow 10,000 immigrants into the country, but only if they’re starting their own company. Thus, they wouldn’t be “taking” anyone else’s job, since the job they’d be creating wouldn’t exist otherwise — they’d be creating it from scratch. Such a visa would encourage more entrepreneurial activity, and create more startups that should (in all likelihood) end up creating a lot of new jobs as well — including a few that might go to those people whining about foreigners “stealing” their jobs…
Filed Under: immigration, startups, visas
Comments on “Time For A Startup Founder Visa”
My guess is that the people who oppose immigration on the basis of “they took our jobs” are just going to see this as more of the same. That could be an American running that business. “They took our businesses.”
Maybe we’d even see bailout money for non-competitive American owned businesses.
There already is a startup founder’s visa, and it’s called the Green Card.
Customs and Immigration has a provision for investors called EB-5 who are starting a US-based business hiring at least ten US citizens. No new laws required either, just file an I-526 and then an I-485. See this link for more info.
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No, simply giving them a green card is not a golden ticket to starting a new, US-Based business. US Citizens already face a number of hurdles when contemplating starting a tech business in the US. I can’t believe that simply giving out green cards makes starting a business by those same immigrant that much easier for them.
Having spent all my professional life in tech I can definitely agree with Mike here; technology is not a zero-sum game. Even when immigrants leave the US after learning some whiz-bang technology, they then can take that technology to start up some new concern that starts trading with US companies adding again to the entire system. I’ve seen it more than once. Trade is good, knowledge is good, technology is good, wherever it comes from or goes to. Its a hell of alot better than exporting war and fear. Christ allmighty, we’ve been doing plenty of that and where’s it gotten us??
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Customs and Immigration has a provision for investors called EB-5 who are starting a US-based business hiring at least ten US citizens.
Uh… requiring you to hire 10 American citizens is not the same thing as doing a startup. That’s a huge burden for someone doing a startup.
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Uh… requiring you to hire 10 American citizens is not the same thing as doing a startup. That’s a huge burden for someone doing a startup.
Especially if that “startup” is really just someone being hired as a “contractor” by an employer to replace a now ex-employee.
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Uh…did you even read the link above? It specifically states you can start a new company, as well as take over a new one.
And how many people do you think you need to do a startup? I guess you’ve done that many startups to know, right?
Re: Re: Re: how many people are in a startup
Google, for example, started business with zero employees (just the two founders — one US-born, one foreign-born) and soon hired its first employee, Craig Silverstein. But if the founders had to meet EB-5 standards before starting their business, Google would not have qualified: zero or one employees (not that huge number TEN at the start!) and only 100,000 dollars’ capital investment (not the million dollars that EB-5 would require *to start* in a startup-favorable areas such as Silicon Valley).
Also see W.E.Peterson’s “Almost Perfect”, http://www.wordplace.com/ap/index.shtml: chapter two narrates how SSI, the startup that later became WordPerfect Corp. started with zero full-time employees (just the founders and some part-time contractors) and an initial investment of $7,000 (actually a loan to the company from one of the founders, who was soon able to get repaid from the company’s organic cashflow).
These, Google’s and SSI’s, are TYPICAL stories for hi-tech startups (as is, for example, Hewlett-Packard’s, see http://www.hp.com/hpinfo/abouthp/histnfacts/timeline/hist_30s.html: initial investment $538, initial employees two [they’re _counting_ the two founders]) and show well how such startups at their beginnings just don’t come even CLOSE to meeting the “million dollars, 10 full-time employees (beyond the foreign founders)” required by EB-5.
Re: EB-5 visa requires a million-$ investment
Paul Graham suggests visas for founders of *startups*: those, by definition, are firms that start small (and generally on a shoestring), and so would never meet the EB-5 requirements — initial investment of at least a million dollars (or 500,000 in a targeted employment area, which would generally be a disastrous place for a hi-tech venture) and creating at least 10 full-time jobs (or maintaining jobs in “a business that has been in existence for at least two year” and is in a bad crisis — the very opposite of a successfull *startup*, in other words).
So, in short, it is absurd to claim that EB-5 can in any way substitute for Dr. Graham’s proposal.
It is hard to accept the fact that immigrants don’t replace current workers when the corporate office tells the supervisor that the department will be laid off and replaced by H1-B visa holders because they will work for 60% of the existing workers salaries. The five workers being laid off get 2 weeks pay. The supervisor gets to stay around until the new workers are trained, and then one of them will be promoted into his job.
The real problem with these programs is the way companies have been allowed to abuse them. In this case I am guessing most of these “small businesses” will be people setting them up as “private contractors” who will take job from existing workers and free up company payrolls.
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“It is hard to accept the fact that immigrants don’t replace current workers when the corporate office tells the supervisor that the department will be laid off and replaced by H1-B visa holders because they will work for 60% of the existing workers salaries. “
Yeah it seems to me Mike is responding to some silly “talk radio” straw man argument here. The real policy thinkers I have heard criticize the exploitation of this system really seem to fear more the lowering of the overall value of a particular skill-set or degree (and the domestic implications of such). When companies say they can’t find any phDs or EEs in United the States, what they are really saying is they can find them cheaper elsewhere. The real argument isn’t so much about the “they took our jobs” populist crap vacuous politicians use to stir up there less intellectually inclined voters and more about reducing the general compensation rate (and there by the payoff for expensive education and training = these degrees don’t pay as much = less people bother to pursue them in United States = (repeat cycle)) in certain fields.
” if a foreigner takes a job, it means one fewer job for Americans”.
It may not always be the case but does in fact happen quite a bit in the tech industry. Many companies abuse the ‘skilled’ workers visa to lower cost of wages, regardless of the prevailing wages criteria. It is hard for those of us in the IT industry to understand how 400k tech jobs have been eliminated in the past year yet employers still need to import foreigners to fill jobs requiring those same skill sets.
I can;t help but to wonder what happens to failed start-ups under an idea like this? Say their company goes out of business in six months or a year? Are they forced to move back out of the country, are they allowed to ‘steal’ existing American jobs then?
I understand that outsourcing (specially offshoring) may be cost-effective because cost of living in other parts of the world is cheaper, hence salaries are cheaper. I really don’t understand how an immigrant living in the US can earn less many than an American for the same job without a scam going on. Are Americans too expensive? Are immigrants willing to set for anything because they can’t get decent jobs elsewhere? Please if someone knows, help me understand.
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Americans ARE expensive.
Foreigners work harder.
Foreigners are smarter and more qualified.
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Not in my experience, see my reply below.
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We’re also FAT.
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Your a fool, an utter fool. I’ve worked with foreign individuals and have found that they are basicatly the same in regard to skill sets. Some are good or execelent, and some are total fools like you. Fkn idiots… They are slouch’s just like you find in American Workers. Just like American workers, these fools(read you scum bag) had to be supported by the rest of the staff(no matter what the nation of origin).
I have nothing against foreign workers, I have something against scum bags like you that would rather hire cheap help(qualified or unqalified) just to save a buck. If the foreign worker has a better resume and is more qualified, then yes he/she should be hired… but if the only reason you are using this individual, no matter what the qualifications, is that theya re cheaper. The company, like you scum bag. Is a fool
Why don’t you fucking just move to another nation you cock sucking scum bag.
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sounds like the rantings of some eurotrash trying to find justification for his ignorance on the subject of the American economy.
It’s true Americans are expensive but so are Cadillacs, Ivy League educations, Apple computers and anything else that is a premium good in the market place.
I’ve met many hard working foreigners but I’ve met a whole lot more hard working Americans.
There are smarter and more qualified foreigners just as there are Americans who are smarter and more qualified than foreign workers it just depends on what perspective you choose to look at the issue from.
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In a large part it’s simply stereotypical, but I can say that some immigrants are willing to settle. I live in an urban apartment complex, and off-and-on over the years many of my neighbors have been Mexican. I have nothing against them, and to be honest rarely had contact with them. However, on occasion, I’d be going up the stairwell or just outside near my door when they would enter/exit their apartment, and you could catch glimpses of their interiors – 3-4 sleeping mats in the living room with no other furniture wasn’t uncommon. Do all of them do this? I doubt it, and I also doubt only immigrants do it. But if you’re splitting the costs of an already cheap apartment among 5+ renters and splitting other costs similarly, simply don’t need the same amount of money when you’re living for less.
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“Are immigrants willing to set for anything because they can’t get decent jobs elsewhere?”
In the short term I believe this is true. Especially for jobs that requires education. But I’ve also seen that out-sourcing is only so good. When I was working as a contractor my bread and butter was adult websites that out-sourced their hosting and main programming. Sure, the tech-saavy was outsourced. But they still required my services for the special tweak or really cool widget idea they might have had. These owner-operators often cursed the off-shore talent for messing up simple tasks or blowing cultural queues. You still have to pay for quality, and these offshore programming mills usually couldn’t provide it.
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I find your isolationist stance ironic when you write like a non-native speaker.
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Simple, they don’t require the same standard of living you do.
I’m rather curious, how a person can move to another country and take a lower paying position than the current occupant of the position. I know it happens, but what were the justifications for the original pay of the position if someone can justify moving across the world, getting a place to live, etc, for less pay? Is it possible the original pay of the position was simply too high?
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If you could come from a shack of a house 10,000 miles away living with your whole family and then move into a 1 bedroom apartment with modern American amenities then the pay of the position would seem acceptable.
If you grew up in America and went to American schools and now your married to an American wife and you have American kids to raise and an American mortgage to pay then the original pay was certainly not too high.
I remember the last post I read on the subject, and I remember Mike making the same claim: that there are those who oppose legal immigration on the grounds that they “take our jobs”. I don’t know these people, and Mike isn’t citing anything there.
I do, however, know people who oppose illegal immigration, and there is an argument that illegal immigrants “take our jobs” because when they work under the table, they’re not on the same playing field. When a skilled worker is taking a job for cash with no taxes and paperwork (and even for less than minimum wage), he quite possibly is taking that job away from someone willing to do that job by the book.
Beyond that, I don’t know what argument is being knocked down, and I agree with Mike past that.
If an immigrant is on a work visa now, how easy is it for him to start his own business? This may be less about keeping people from “taking our jobs” and more about fixing a flaw in the system.
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I remember the last post I read on the subject, and I remember Mike making the same claim: that there are those who oppose legal immigration on the grounds that they “take our jobs”. I don’t know these people, and Mike isn’t citing anything there.
Heh. You should read the comments on these posts. Illegal immigration is a totally different subject.
There are MANY MANY people opposed to things like the H1B program which is only for skilled immigrants in the tech and sciences field.
That program is often abused, and we should be focused on the abuses, but people who are against it claim that it takes away American jobs, ignoring how it often actually creates more jobs.
The illegal immigration subject is entirely different. Just do a search on H1Bs and see how many “they’re taking our jobs!” stories you’ll find — none of which have anything to do with illegal immigration.
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“If an immigrant is on a work visa now, how easy is it for him to start his own business?”: for H1B visas the answer is unambiguous, and is, “essentially impossible”. A H1B visa transfer is only for the purpose of moving from one employer to another; if the visa holder tries staying around without an employer, e.g. by founding their own startup, they’ll be expelled.
I have never heard any proposal for “fixing the flaw in the system” by allowing the H1B visa holder to keep working in the US _without_ a sponsoring employer, and it’s not clear what such a fix might be, except something along the lines of Dr. Graham’s proposal (visas specifically for startup founders, or extension of H1B criteria from highly qualified employees with a sponsoring employer to cover also startup founders with a sponsoring capitalist among Dr. Graham’s proposed roster of “qualified venture capital investors”).
Re: rewrite
Let me rewrite your post a bit
“there is an argument that illegal immigrants “take our jobs” because when they work under the table, they’re not on the same playing field. When a skilled worker is taking a job for cash with no taxes and paperwork (and even for less than minimum wage), he quite possibly is taking that job away from someone willing to do that job by the book.”
Same thing, different words
“there is an argument that illegal immigrants “take our jobs” because when ?n American citezen illegally hies an immigrant, they’re not on the same playing field. When a American employer gives a job for cash with no taxes and paperwork (and even for less than minimum wage), he quite possibly is taking that job away from someone willing to do that job by the book. But he then has to pay taxes and who want that?”
freaking idiots
“The tricky part might seem to be how one defined a startup. But that could be solved quite easily: let the market decide. Startup investors work hard to find the best startups. The government could not do better than to piggyback on their expertise, and use investment by recognized startup investors as the test of whether a company was a real startup.”
Paul Graham is an idiot
Brit
My father-in-law (an English man) tried to move to America years ago to start his own business. He was denied entry on the grounds that he could only open another branch or franchise of an existing business.
He moved to Spain instead where he now has around 20 people working for him.
He’d love to move to America but his business isn’t really the sort where it would make sense to open another branch nor would he be able to hire a large amount of workers straight away. Such a visa would be a real bonus to America and definately attract the right kind of people.
3rd world labor does not make a nation great, it makes it a 3rd world nation.
Re: 3rd world labor
The 3rd world, a cold war expression assigning unaligned countries, and now used as a pejorative denomination of undeveloped and developing countries, are regions where those highly specialized workers trying to emigrate to the USA are rare, but the job opportunities to those professionals are rarer. Those 3rd world labor, as you named them, are as skilled as the above average, highly specialized, workers in the USA, being totally skilled to work in any developed country.
They took are jobs!
The start-up founder visa sounds like a standard political non-action. It’s just the same old visa policy repackaged and producing more paper work and no more results. Starting a business takes a large amount of money and I doubt there are many people out there with huge sums to bring with them.
As for the foreigners taking jobs: I do consulting work as a trouble shooter in the IT industry. My bread and butter is being parachuted in at the end of a project that was done by off shore firms or H1B contractors and fix what they got wrong. It’s not that the non-locals are bad programmers – far from it, some are outstanding. It’s mostly documentation, communication, and management problems. Many managers forget that the bulk of a software project is analysis, documentation, and testing, not coding. I hope companies do not realize that H1B workers and off-shore projects are false savings and just push even greater costs onto the back end of an IT project when they start to fail. It would cost me a large amount of business.
We already have one of these....
… I forget which visa category, but it’s actually a green card-enabling thing. Basically you invest over $100k and employ 12+ people, and you will automatically qualify for a green cars (note, numbers may be slightly low).
Seeing as how unemployment rates are skyrocketing for American workers, I don’t think we need ANY outside help right now. I’m all for starting new businesses, but I think there are plenty of good American workers that could fill all the positions.
And while I don’t claim that ALL foreign hires take away jobs from Americans, there are LOTS and LOTS that, in fact, do. I’ve heard plenty of stories about companies, especially tech companies, that lay off most or all of their American work force and hire workers in India to take their place, because they work for peanuts. Foreign workers are fine and even necessary in some situations, but the privilege is being highly abused, and it needs to stop. Between buying tons and tons of foreign goods (mostly from China), hiring tons of foreign workers, and stuffing the already-exploding wallets of the Arabs with all the oil, it’s no wonder America is flat broke. I see lots and lots and lots of money going out of the country, and not nearly enough coming back in.
Skilled Immigrants
There is nothing to fear from a flood of immigrants, especially those with “special skills”. It can bring nothing but good for you, your family and your nation. Just ask a Native American.
Isn’t the point of E-1 or E-2 roughly this?
i lost my job to a H1b visa guy. when a guy with a subsidized degree goes for a job while i have to pay off my loan he is of course willing to work for lots less
its not about the jobs that are lost it is about the dilution of wages
Missing the point
Most people have these strong opinions against the “stolen job” argument, yet have little to no experience with the problem.
Wait until a population explosion hits your town and the children of the immigrants grow up. Think they work in the fields?
Founder Visas
Without more, I can see every immigration “consultant” saying “fill out this form showing that you are starting your own business – what? No, you don’t have to do it, just claim it”.
Lord of the Visa - check this out (funny)
Hey Michael,
Thanks for doing up this post. We created a comedy (but totally serious) about the Startup Visa – We call it “Lord of the Visa.” (from Lord of the Rings)
Looks like you’re an Elf! Hooray!
http://blog.vidli.com/startup-visa/
Enjoy…
Leaving MSFT to do a startup in India
I thought I was the only one facing this confusing situation. I had stacked up Approx 90k, am going to turn 26 next year and wanted to do a startup . Next month , I’m leaving my fulltime job at MSFT and going back to India to do this.
No complaints though ; my 2.5 year stay in the US has been a great one – got to meet wonderful people and learn a lot.
Many other Indian guys are doing this too . How do people fo a startup here ? I guess its through some VC or University Incubator – anything for those of us spending our own money (which is generally a smaller amount ) ?
*Can’t disclose my name because I’ve yet to resign officially.
I find it quite funny as I see US as the center of immigrants. Looking back to history Indians are the ones who always lived their so that everybody else are immigrants.