BackUS’ new visa Bill to target immigrant entrepreneurs
US’ new visa Bill to target immigrant entrepreneurs
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New Delhi: Highly skilled Indian workers whose dreams to move to the US were dashed by recent H1-B visa fee hikes may soon have another avenue to get a visa to work—and potentially gain permanent residency—in that country.
Senators John Kerry (Massachusetts-Democrat) and Richard Lugar (Indiana-Republican) have announced that they will be reintroducing legislation next week aimed at courting immigrant entrepreneurs.
The StartUp Visa Act would create a new category of work visa—EB-6—for foreign-born entrepreneurs able to raise $250,000 investment from American angel investors or venture capitalists, and gives them the opportunity to adjust their status to permanent residency if they are able to achieve one of three conditions within a two-year period of time: create five new American jobs, generate over $1 million in sales, or raise more than $1 million in venture capital funds.
The act dovetails with President Barack Obama’s goals to “out-innovate, out-educate and out-build the rest of the world," as outlined in his state of the union address earlier this year, and has garnered bipartisan support in the Senate, as well as among many big names in angel and venture capital investing including Y Combinator’s Paul Graham and Foundry Group’s Brad Feld.
“As the president pushes for an innovation and start-up America agenda, you cannot ignore immigration," said Emily Mendell, vice-president of strategic affairs for National Venture Capital Association, a company headquartered in Arlington, Virginia. “It’s the key to our future; it’s key to entrepreneurship in the United States, and to assume that we can get this done on our own without foreign-born nationals is misguided."
Foreign—and particularly Indian—entrepreneurs have long contributed disproportionately to the American start-up scene: a joint study conducted by Duke University in 2007 found that between 1995 and 2005, immigrants helped found nearly 52% of Silicon Valley startups.
Of immigrant-founded companies nationwide, 26% were found to have at least one Indian initiator. In 2006, the same group conducted a follow-up report and found that nearly 25% of patents worldwide were filed by foreign nationals living in the US.
Now, many businesses fear that the US may be losing its competitive edge, as an increasingly hostile immigration climate—including recent legislation increasing H1-B visa fees—in combination with growing opportunities abroad, are drawing many of America’s highly skilled immigrants elsewhere.
“Twenty years ago, if you wanted to start a high-tech business and grow it from the ground up, the US was the only place to be, and had a monopoly on the ecosystem," said Mendell. “That’s no longer the case. Over the past 10 years, foreign countries have been building their own VC (venture capital) ecoystems—we’ve basically exported our VC model to the global economy, and now people have a choice."
Even though the venture ecosystem in India is growing, it remains minuscule compared with the US. Last year, the US saw a total of $11.6 billion being invested in deals. In India, deals below the $50 million ticket size amounted to just $3.3 billion, according to VCCEdge data. The founder of early stage investors’ association India Angel Network, Saurabh Srivastava, is sceptical about the legislation and said the existing immigration policy works.
“The US is a meritocracy which already attracts and supports good businesses. I’m not sure they need new schemes,"he said. “They shouldn’t destroy the existing system—like changing their outsourcing rules. The previous set-up was robust enough. Micromanaging the entrepreneurial ecosystem doesn’t work."
The StartUp Visa Act was first introduced in the Senate in February last year, but never made it to the floor for a vote. Whether it passes this year—or even gets floor time—is uncertain, as the political climate surrounding immigration reform in the US is still highly polarized, according to Marc Rosenblum, a senior policy analyst with Washington, DC think tank Migration Policy Institute.
“There’s pretty wide recognition that the United States benefits from high-skilled immigrants and entrepreneurs, and I think this is consistent with some of the themes the president has raised in terms of using technology and innovation to get the economy going," he said. “But the climate around the public and the policy debate doesn’t always make a clear distinction between unauthorized and legal immigrants."
Rajan Mehra, a partner at Clearstone Venture Partners, said the Bill’s emphasis this time was on creating jobs, while the last time time it seemed to be innovation.
malia.p@livemint.com
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