I'm thinking: how can this be exploited? Can someone just say they're building a new way to shorten urls and need two years in the country to build their business to fruition? And what defines success or progress?
There are big companies hungry for H-1Bs; could they exploit this new visa by "investing" small amount of money and then outsourcing some of their work into this newly created "company"?
If someone did apply under false pretenses, get here, and do nothing, then what would be the negative impact on the country?
PG's suggestion was that they cannot work for other companies, so they are not depriving anyone of a job. They will have to live somehow (on whomever's money they have), and that will go into the local economy. If you add a clause to the visa that they cannot claim any type of social welfare, then I think the potential downside of 'gaming' nowhere near outweighs* all the potential upsides.
* - opportunity cost of the 10,000 spots excepted, which is why you have the right folks picking the 10,000.
I worked full-time is a freelancer for quite a while. Nobody asked for my papers, and I won't say anything about taxes. I could've easily laid low when (the few) clients called asking for info (SSN, etc.) for my 1099s, as income was distributed well enough that none would think it a big deal to not send me one.
There's an underground economy, and it doesn't always involve narcotics/guns/prostitutes/dog fighting/etc.
While I deposited checks (one potential obstacle), I don't think anybody would have quaffed if I asked them to pay me via PayPal, where I could transfer the money to a friend's ("accomplice's") bank account.
Step 1. Pay lobbyist to add the following clause to the rules: "Treasury will provide 20:1 non-recourse loans to participating investors" -- to attract the 'hot money' and foreign capital, of course. Just copy the clause right from PPIP, in case you think it's not possible.
Step 2. Wealthy foreign investor: send random minion on 2-year luxury vacation to the U.S. Invest in minion's "startup" through some convoluted channel (perhaps a Wall St. Bank's unofficial immigrant startup investment fund).
Step 3. Sell "consulting services" to minion's startup using your U.S. shell company.
Step 4. Free Money.
Obviously there are good and easy ways to prevent this absurd little tinfoil hat scenario I've constructed in the bat-filled cavern where my brain should be. But considering the recent track record of our government botching up finance-related issues, I wouldn't expect anything less...
Having been through the hoops, I'd generally support this, but it's a tough sell in today's economy. Because there are emotions involved.
There are already similar visas (EB-5 and E-1). Especially the E-1 category is very close and could easily be amended to fit Paul's ideas (I used the E-1 as co-founder of my previous startup, EVE).
One issue that needs to be addressed: you are not likely to get funding until you move here. But if the visa gives you a grace period (say 6 months) to move first before you get funding, then it will be abused.
Here are some details based on my personal experience (I have been under 6 different visa status over the last 15 years).
There is a misconception that an investor visa requires cash investment (in the order of $500K to $1M). That's false. This number comes from the EB-5 green card route. The E visa is a temporary visa, but it is valid 5 years and renewable pretty much as long as you want. There is no minimum cash investment required in the statute.
You do need to convince the US embassy of your home country that you have a good business plan. Actually, to be convincing, it better be more than a plan: early customer interest, letters of intent (LOI), etc. all constitute strong elements to include in your application.
In line with PG's idea, letters from prominent VCs about their interest may work as well.
For about $6,000, you can get a good, proactive immigration lawyer to prepare your case, assuming your business opportunity is real.
Thanks for the update. As the above comenter says, apparently Iran is a treaty country but India is not. Nothing against Iran, I'm just referring to the recent anti-Iran rhetoric in the US, but it's definitely sad. Wish Indian bureaucrats were more effective at their jobs.
That's because US citizens seeking VC who haven't moved to Boston or San Jose usually have no good excuse not to; for VCs, it's an easy way to filter out undedicated founders. Foreigners who want to move there but can't get a visa have a much better excuse.
That assumes that VCs have a need to invest in people outside the valley or Boston. VCs would have to travel outside the country to meet potential founders (since they don't yet have a visa) There are enough founders in those two places that VCs don't have any pressing need to jump through such hoops.
Can anyone think of a wonderful business (think truly great) that couldn't get funding until they were in the US?
From what I have seen there is tons of money if your model is great.
I think the counter is true: it's much easier to raise money for bleeding edge ideas in the US. But, ask yourself whether you want to be doing a bleeding edge business (e.g. based on twitter or facebook) or one thats more likely to make you wealthy (B2B).
Can anyone think of a wonderful business (think truly great) that couldn't get funding until they were in the US?
How would you know? You only hear about the success stories and the spectacular failures, not the full spectrum in between.
But, ask yourself whether you want to be doing a bleeding edge business (e.g. based on twitter or facebook) or one thats more likely to make you wealthy (B2B).
Just because you'd prefer to do a B2B startup you want to deny others from trying to go straight to the top?
"How would you know? You only hear about the success stories and the spectacular failures, not the full spectrum in between."
By truly great I was meaning something that was a spectacular success. Every company I have ever had the pleasure of knowing personally with a great model had plenty of capital, whatever location they were in. Others who thought there model was great, but clearly was too risky didn't.
"Just because you'd prefer to do a B2B startup you want to deny others from trying to go straight to the top?"
I am not denying anyone from starting anything, just pointing at the facts. It's much easier to get a B2B making money than a twitter widget that isn't charging.
In my opinion, those types of businesses are never going to be the next youtube, so why bother. You either go for the home run or the easy money. But that's just my opinion.
I was a bit disappointed that the author of the article didn't address the difference between what he was proposing and the existing investor visas. They seem pretty close, to the point where what he's seemingly asking for could be achieved by tweaking existing programs rather than creating entirely new visas. The intent and purpose of the investor visas are exactly what's being discussed: bringing talented people to the U.S. so they can start businesses that employ Americans and contribute to the economy.
If those programs aren't doing what they're supposed to do, or if they have capital/investment requirements that aren't in line with what modern high-tech companies require (i.e. modern startups don't require as much as the minimum investments for the visas) then we should address that, but I don't think it needs to be done from a blank slate.
Probably true when you look 4-5 years into the future and some of these seed companies start growing out into real, profitable, sustainable businesses.
Can you point to an example where a politician has received unequivocal credit or blame for something he or she did 4-5 years ago? It often seems that the look-back period is only about two weeks. The enormous cost of Sarbanes-Oxley to US competitiveness doesn't seem to have adversely impacted the careers of Sarbanes, Oxley, or the numerous other legislators who voted to enact the regulation.
The funny things is polititions who try to take credit for truly inovative ideas get laughed at: "Creating the Internet." But, those who find creative ways to waste money in their district can gain long term support.
Stranger still is the ability for politicians to take credit for bad / poorly implemented ideas that sound good: "No child left behind."
A risk might be that if even one Al Qaeda terrorist gets in under this program, then the whole program will be shut down, and the sponsoring member of Congress's name will be infamous forever after.
There would probably have to be some monitoring that visa recipients are actually engaging in start-up activities; in which case there shouldn't be time for any terrorism...
Good VCs vet potential investees better than the FBI does. And that is true without the risk of being blamed for enabling a terrorist. Think about how well a VC would vet someone coming in from outside the country. (How well they can vet such a person is a separate but important issue).
And at least one of the 9/11 hijackers came in on a student visa. The student visa program has not been shut down (although checks for all visa programs have become more stringent).
That's a good idea. The visa system generally makes it hard for hard-working highly-motivated highly-educated foreigners to come to the US and create value. PG is right that we should be attracting these people instead of throwing random obstacles in their way.
-- American-born son of an immigrant Indian scientist
in asking the would-be immigrant to put up talent rather than money as the sign he will run a successful business. That's in line with your usual take on how easy it is to start up new businesses in today's economy.
It's an intriguing idea to broaden the talent pool available for seed-stage investors to invest in. The political objections will revolve around
a) What happens to the people who start up but flame out, failing in their businesses? It's expensive to deport people who have already arrived, and they sometimes disappear from the view of law enforcement.
b) Why shouldn't the United States start-up investment market be preferentially granted to persons who have legal right to work in the United States? (My bias is toward free movement of people across borders, but the only reason immigration law exists at all is that not everyone shares my bias, not in any country.)
P.S. I am a lawyer, and used to practice immigration law, although the bulk of the cases I worked on involved different visa categories.
Nice idea. Feels like a version of the E-2, brought in line with the new realities of the cost of starting a web based business - http://en.wikipedia.org/wiki/E2_visa (government is always slow). Rather than requiring applicants to bring monetary capital into the country, they'd be required to bring start-up capital, as measured by those who will invest in it.
I actually am in the US on an E2 visa, and I founded and (still) run entp.com. In my mind, the investment requirement of the E2 merely is a way of your providing proof of your ability to achieve success.
That was amazing, a window into the thought process. Knowing that the whole bit about Erdos numbers doesn't appear in the final text I was fascinated watching the process of its evolution into the final completely different idea.
An e-petition will do diddly. Write your senator, congressman and governor on paper, sign the documents and mail them.
Paper letters are the currency of elected representatives, and a stack of 10k letters descending on numerous offices would do infinitely more than a lonely web page with 50k e-mail addresses.
One danger is that the accreditation process for recognised investors could be hijacked and used to give special privileges to a small number of firms.
That's simple. You just make the accredidation based on the number and size of US investments and you allow some small portion of those to be of this special class.
By definition these 10,000 founders wouldn't be taking jobs from Americans
"But, but, but: their companies will compete with and disrupt established American businesses, destroying American jobs! Why, a 4-foreigner web news or classified startup could put dozens of (unionized, citizen, voter) newspaper employees out of work!"
Of course I don't believe this is true, nor would it even be a good reason to restrict entry if it were true. (Better to have the new disruptive companies here, than elsewhere.) But that's the sort of deranged logic used against broader immigration. The neat trick of limiting the visas to those starting companies will only help a little against anti-immigrant emotions.
They wouldn't all grow as big as Google, but out of 2500 some would come close.
I suspect close-to-Google-scale successes come more like 1-in-100,000-tries than 1-in-2500. There's a tendency to see every startup as a potential little Google -- we could call this 'Google Goggles'. But Google is one-of-a-kind, and it shouldn't require even one success of that scale to make the case for broader immigration.
For example, shouldn't these visas be available to immigrants whose 'startup' is a donut shop, nail salon, or bodega?
(I also suspect such a program could be easily gamed... but as I'd like to see more immigration of anyone ambitious, I suppose that's a feature not a bug.)
I'm just happy to see the karma going where it belongs. I "found" these essays three days before my first trip to Bombay, and read all of them on the 14 hour nonstop. I showed up only slightly tired from the travel, but extremely optimistic on the world, the future, and myself. And that made a difference in convincing my now in-laws that I was a worthy son-in-law, deserving of their daughter, the most wonderful woman I know.
Hear, hear. I couldn't agree more. I have a foreign-born friend who has inspired similar thoughts in me. I'm convinced this friend could found an incredible web startup here in the States if only the Federal Government wasn't making it so difficult for him.
I wrote to my congressman expressing this sentiment. He replied saying in a nutshell: "Don't worry, I strongly support protecting American jobs from foreign encroachment."
I wrote back to say that this was nearly the complete opposite of my concern, and I asked him to respond with an indication that my original email was not misunderstood. Of course I never heard back.
I wonder, how could one turn this idea into a lobbying effort? Who else realises the benefit of it and would support it? Whom should be contacted and what representation should be made?
I think it's a great idea, btw.
Of all people BillG has actually been before congress and represented on this issue. He had said that Microsoft had often been naive with regard to the contact needed in Washington to get things changed.
Sorry, but I don't think that this makes much sense. INS already has their hands full, and it wouldn't be much fun for them to have to check up on thousands of startup founders to be sure that they're in fact running their business (1) viably, and (2) according to their agreed business plan.
The system would be unbelievably easy to cheat. It also would be stupid easy to turn a "startup" into a money laundering scheme.
Don't take this the wrong way: I really wish that there were an easy way to let legit founders into the US. But it just isn't practical.
PG said: 10,000 people is a drop in the bucket by immigration standards
For comparison, there were 591,050 student and exchange visas granted in 2007 [1]. If the INS can handle checking up on individual students following educations via Universities, they can do the same with 1/200th the number of startups via investment firms.
The system would be unbelievably easy to cheat
Oh, how? And why is accreditation a viable solution for Universities, but not investors?
I really wish... but it just isn't practical
Give one shred of evidence aside from senseless pontification and I might consider it.
"PG said: 10,000 people is a drop in the bucket by immigration standards"
Yes, in terms of people. But you fail to understand that it's an entire new process and system that would have to be invented and executed.
You just don't think like a con-man. Universities have quite a bit on the line, such as accreditation. A private company has next to nothing on the line. Anyway, here's how I'd do it:
1. First off, I'd need to know somebody in the US who has a viable business and would vouch for me. Because immigrant communities support business focused on their interests, this wouldn't be very difficult. Of course they'd agree, because of the benefits for the home country (sending money home, etc.).
2. Have them offer fake investments to me and a pool of founders. Get approved by INS/State.
3. Once in the US, work as I please. Funnel this money back into the "startup" as profits. Plenty of startups can't even turn a profit, so financials wouldn't have to be impressive.
4. Rinse, repeat. The same business would only get approved so many times, but there are tons of businesses here.
Now, for the unscrupulous way (since there's nothing particularly immoral about the previous scenario). Note that I'm for the legalization of drugs, but that's not the point: The US gov't is sure as hell against that.
1. Have associate(s) in the US prop up a shell of a business that appears to be legitimate. Have them offer a huge investment for what appears to be a startup's credible business plan.
2. Move in under an alias with fake documents.
3. Funnel drug money through the "startup," which would be an ideal money laundering node. Because the plan is intended to produce successful businesses, nobody would blink an eye at the eye-popping profits. Just bullshit as much as necessary...if YouTube cooked the books, they could convince people that they were turning $150M profit annually easily. Show your cards as you please, since you're holding the deck.
4. If things get even remotely hot, leave the country. So much money's been successfully processed at this point that it's undoubtedly a net win. Hell, say you're flying to Lima to make a commencement speech on business. Nobody would stop you. The associates could claim ignorance obviously, as you were just some entrepreneur they put their hopes and dollars in. Even if the startup were irrevocably linked to money laundering, you're back home and extradition isn't happening, since you used a false identity.
5. Rinse, repeat with other associates.
"Give one shred of evidence aside from senseless pontification and I might consider it."
Evidence on a virgin immigration plan? I'm sure there's plenty out there!
Let's flip this: Tell me how you prevent either of the two previous scenarious, short of having the gov't handle the entire recommendation/approval process, which would pretty much defeat the purpose.
I think pg's point of investors accreditation system is that it's not the government you have to cheat, but the group of pre-selected investors. (I'd imagine something similar to professional guilds... you have to be recognized by peers to be in part of the investor group of deciding who can get invested with this visa, for example).
The obstacle I see is that the stake of having authority to say who can get visas for work is very high these days (not like student visas); lots of people are seeking ways to get working visas desperately. So there would be lots of political frictions to introduce investor's accreditation system.
But yet, if politicians are convinced that this is crucial to revitalize the economy (which is probably one of the highest priority items), much of such muddling of power games may be avoided.
"Of course they'd agree, because of the benefits for the home country (sending money home, etc.)."
Sounds a bit like your first thought was along the line of "visa == immigrant == [name your third world country]". There are (still) many people in old Europe or Japan who think that US is a hotter place than home for a startup... and I'm part of them.
It's slowly changing though, I feel it around me : patents and costs of litigation, Sarbanes Oxley (IPO exit... gone ?), visa problems (the lottery thing with H1-B visa). It did hit quite a lot the American dream.
Specially when it comes to opening a branch in the US for small businesses : insurance costs literally explodes, it's harder to send employees to the newly created branch (H1-B is not the only solution, but it was the one that scaled the best), so it's harder to control it.
I used to work in New York City, with an H1-B. When I decided to create a startup I eventually trashed my H1-B and went back home. I didn't want to, but between keeping a day job and doing a startup part-time in the US, or doing a startup full time home, I choosed the latter.
I still think that US would have been much better, and I liked the life there quite a lot too (much more than horrid Paris), but well, my cofounder was in France and could not come... had there been a startup Visa, he/we would have applied, and we would have moved to SF.
Incidentally my former NY employer opened a branch in Switzerland, which is slowly becoming the main office... one of the reasons is the visa issue : it's much easier to move a US citizen to Geneva, than a European citizen to US... So in the end there might be just one marketer remaining in NYC, while it was supposed to be the opposite at first !
(For people wondering my first startup attempt did fail quite miserably... second attempt is faring pretty well so far)
It's a matter of cost versus benefit, right? If the US is able to attract successful startups the additional cost will be more than made up for in additional taxes.
Second, pg's proposal seems to be a more targeted version the of E-1/2 visa with the additional benefit of shifting some of the administrative burden onto the shoulders of investors. So it's probably less work for the INS than the existing E-1/2 process.
Sounds like a pretty good deal for the US tax payer.
Neat idea except for the part about using investors to validate which startup counts. What about the plenty of viable and compelling startups that have decided to bootstrap?
It seems like this might be more viable politically than most attempts at immigration reform in the US because it neutralizes (if not reverses) the "they're taking our jobs" objection. The objection could hardly become "they're starting our businesses".
On the other hand, it's hard to underestimate the irrationality surrounding this issue.
Edit: What meaningful changes could the Obama administration make without having to go through Congress?
I usually avoid politics, but since we now seem to have an administration that's open to suggestions, I'm going to risk making one
If your goal is to persuade as many people as possible, insulting the previous administration and by extension those that voted for Bush is a bad start. I was already opposed to your idea before the second sentence, despite the fact that I'm an advocate of increased legal immigration.
I believe the reference is to all administrations prior to the current one. Transparency has been a hallmark of the current administration since day one.
I'm always curious when people say they advocate increasing immigration. Right now, the United States takes about 1.2 million immigrants legally into the country every year. Does this seem too low a number to you? If so, do you see a practical need for some kind of limit, or are you in favor of limitless immigration?
The problem is that the majority of illegal immigrants are at the low end of the tax spectrum, often taking more out than the put in. The people who we'd ideally want in the country are at the other end, and they usually aren't here illegally. That is the group PG is trying to target here, and I'm ALL for making it easier for them to immigrate.
I completely agree, our immigration system needs reform, badly. In fact, I see "low hanging fruit" that could really improve our economy and quality of life.
That said, I didn't really get an answer... you say you're in favor of increasing legal immigration - are you in favor of changing the mix, of do you think that we need to go way above the current level of 1.2+ million a year?
The tricky part might seem to be how one defined a startup. But that could be solved quite easily: let the market decide.
As much as I support your position (I'm an open immigration advocate), the concept of "Let the market decide" isn't exactly a position I hear the government ever clamoring to support. The government wants control, and giving up control is it's antithesis.
As a non-American who applied to YC twice the article was a pleasant surprise. However I'm not sure America is as attractive to non-American founders as some people think. I'll explain (my arguments are mostly personal perceptions...I have no practical evidence yet on any of this since my own startup is still at the "wrote some code" stage).
Let's suppose there are 2 types of founders: people who have enough money & connections, and the young "live on Ramen noodles" type founders.
For the "money & connections" type, a lot of foreign countries offer cheap but still qualified programmers and don't put too many obstacles on founding companies so if your country is like that it might make sense to stay. For the "Ramen" type, many of them may not afford America's often high living costs.
As for the argument that the US provides a better/more free market... even this is changing: The internet probably allows relatively easy selling to worldwide customers from any country.
All that said, the American dream probably still lives on and many people would likely provide counter-examples to my limited point of view. Of course pg didn't claim that coming to the US is a no-brainer for every single talented hacker. There are probably enough of those who are interested to satisfy the 10,000 founder/year goal.
"For the "Ramen" type, many of them may not afford America's often high living costs."
I think the algorithm PG proposes is something like this:
1. Produce enough that you would be able to convince someone to fund you. Maybe this takes a prototype, a convincing sales pitch, ramen profitability, etc.
2. Convince someone to [seed] fund you.
3. Move to a place with an environment favorable to startups.
4. Continue working on your product, now with access to investors, other founders, good employees, great weather, ...
The idea is to get to step 4 as fast as possible. In most parts of the world you'd never be able to find good investors or a startup-supporting culture, and that counts for lot. As PG has pointed out, there's a huge variance in startup-friendliness even amongst the major cities in the US.
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[ 2.6 ms ] story [ 145 ms ] threadI don't think you need to define progress.
PG's suggestion was that they cannot work for other companies, so they are not depriving anyone of a job. They will have to live somehow (on whomever's money they have), and that will go into the local economy. If you add a clause to the visa that they cannot claim any type of social welfare, then I think the potential downside of 'gaming' nowhere near outweighs* all the potential upsides.
* - opportunity cost of the 10,000 spots excepted, which is why you have the right folks picking the 10,000.
There's an underground economy, and it doesn't always involve narcotics/guns/prostitutes/dog fighting/etc.
While I deposited checks (one potential obstacle), I don't think anybody would have quaffed if I asked them to pay me via PayPal, where I could transfer the money to a friend's ("accomplice's") bank account.
Step 1. Pay lobbyist to add the following clause to the rules: "Treasury will provide 20:1 non-recourse loans to participating investors" -- to attract the 'hot money' and foreign capital, of course. Just copy the clause right from PPIP, in case you think it's not possible.
Step 2. Wealthy foreign investor: send random minion on 2-year luxury vacation to the U.S. Invest in minion's "startup" through some convoluted channel (perhaps a Wall St. Bank's unofficial immigrant startup investment fund).
Step 3. Sell "consulting services" to minion's startup using your U.S. shell company.
Step 4. Free Money.
Obviously there are good and easy ways to prevent this absurd little tinfoil hat scenario I've constructed in the bat-filled cavern where my brain should be. But considering the recent track record of our government botching up finance-related issues, I wouldn't expect anything less...
There are already similar visas (EB-5 and E-1). Especially the E-1 category is very close and could easily be amended to fit Paul's ideas (I used the E-1 as co-founder of my previous startup, EVE).
One issue that needs to be addressed: you are not likely to get funding until you move here. But if the visa gives you a grace period (say 6 months) to move first before you get funding, then it will be abused.
Many (or most) of the people taking advantage of such a visa might be those already in the US on student or work visas.
There is a misconception that an investor visa requires cash investment (in the order of $500K to $1M). That's false. This number comes from the EB-5 green card route. The E visa is a temporary visa, but it is valid 5 years and renewable pretty much as long as you want. There is no minimum cash investment required in the statute.
You do need to convince the US embassy of your home country that you have a good business plan. Actually, to be convincing, it better be more than a plan: early customer interest, letters of intent (LOI), etc. all constitute strong elements to include in your application.
In line with PG's idea, letters from prominent VCs about their interest may work as well.
For about $6,000, you can get a good, proactive immigration lawyer to prepare your case, assuming your business opportunity is real.
I think it's likely that if this visa existed, VCs would adapt to it by becoming more open to funding people who haven't immigrated yet.
From what I have seen there is tons of money if your model is great.
I think the counter is true: it's much easier to raise money for bleeding edge ideas in the US. But, ask yourself whether you want to be doing a bleeding edge business (e.g. based on twitter or facebook) or one thats more likely to make you wealthy (B2B).
How would you know? You only hear about the success stories and the spectacular failures, not the full spectrum in between.
But, ask yourself whether you want to be doing a bleeding edge business (e.g. based on twitter or facebook) or one thats more likely to make you wealthy (B2B).
Just because you'd prefer to do a B2B startup you want to deny others from trying to go straight to the top?
By truly great I was meaning something that was a spectacular success. Every company I have ever had the pleasure of knowing personally with a great model had plenty of capital, whatever location they were in. Others who thought there model was great, but clearly was too risky didn't.
"Just because you'd prefer to do a B2B startup you want to deny others from trying to go straight to the top?"
I am not denying anyone from starting anything, just pointing at the facts. It's much easier to get a B2B making money than a twitter widget that isn't charging.
In my opinion, those types of businesses are never going to be the next youtube, so why bother. You either go for the home run or the easy money. But that's just my opinion.
Is there any other options?
Not so: people could do the initial work for startups on student and H1-B visas, which they could then convert if they got funded.
If those programs aren't doing what they're supposed to do, or if they have capital/investment requirements that aren't in line with what modern high-tech companies require (i.e. modern startups don't require as much as the minimum investments for the visas) then we should address that, but I don't think it needs to be done from a blank slate.
(Information on immigration through investment <a href="http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f..., assuming that link is stable.)
I think this would have such a visible effect on the economy that it would make the legislator who introduced the bill famous.
It reminded me of "Law 13" of "The 48 Laws of Power":
uncover something in your request... that will benefit him, and emphasize it out of all proportion.
http://news.ycombinator.com/item?id=555691
Stranger still is the ability for politicians to take credit for bad / poorly implemented ideas that sound good: "No child left behind."
And at least one of the 9/11 hijackers came in on a student visa. The student visa program has not been shut down (although checks for all visa programs have become more stringent).
-- American-born son of an immigrant Indian scientist
http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f...
in asking the would-be immigrant to put up talent rather than money as the sign he will run a successful business. That's in line with your usual take on how easy it is to start up new businesses in today's economy.
It's an intriguing idea to broaden the talent pool available for seed-stage investors to invest in. The political objections will revolve around
a) What happens to the people who start up but flame out, failing in their businesses? It's expensive to deport people who have already arrived, and they sometimes disappear from the view of law enforcement.
b) Why shouldn't the United States start-up investment market be preferentially granted to persons who have legal right to work in the United States? (My bias is toward free movement of people across borders, but the only reason immigration law exists at all is that not everyone shares my bias, not in any country.)
P.S. I am a lawyer, and used to practice immigration law, although the bulk of the cases I worked on involved different visa categories.
Cost me more than $6K (in attorney fee, etc) and countless number of hours to prepare all the documents without any guarantee that I'll get it.
It _is_ more scary than applying to YC, now good luck to myself.
Very cool.
I think pg+hn+/. etc could generate 50k signatures.
ideas?
Paper letters are the currency of elected representatives, and a stack of 10k letters descending on numerous offices would do infinitely more than a lonely web page with 50k e-mail addresses.
http://whitehouse2.org/priorities/1948-visas-for-startup-fou...
"But, but, but: their companies will compete with and disrupt established American businesses, destroying American jobs! Why, a 4-foreigner web news or classified startup could put dozens of (unionized, citizen, voter) newspaper employees out of work!"
Of course I don't believe this is true, nor would it even be a good reason to restrict entry if it were true. (Better to have the new disruptive companies here, than elsewhere.) But that's the sort of deranged logic used against broader immigration. The neat trick of limiting the visas to those starting companies will only help a little against anti-immigrant emotions.
They wouldn't all grow as big as Google, but out of 2500 some would come close.
I suspect close-to-Google-scale successes come more like 1-in-100,000-tries than 1-in-2500. There's a tendency to see every startup as a potential little Google -- we could call this 'Google Goggles'. But Google is one-of-a-kind, and it shouldn't require even one success of that scale to make the case for broader immigration.
For example, shouldn't these visas be available to immigrants whose 'startup' is a donut shop, nail salon, or bodega?
(I also suspect such a program could be easily gamed... but as I'd like to see more immigration of anyone ambitious, I suppose that's a feature not a bug.)
Do the investors have to be Americans, or is it enough that the investment is spent in the U.S.?
When the money runs out or the startup fails, are the founders asked to leave?
Thanks, Paul, for another excellent essay.
I wrote to my congressman expressing this sentiment. He replied saying in a nutshell: "Don't worry, I strongly support protecting American jobs from foreign encroachment."
I wrote back to say that this was nearly the complete opposite of my concern, and I asked him to respond with an indication that my original email was not misunderstood. Of course I never heard back.
I think it's a great idea, btw.
Of all people BillG has actually been before congress and represented on this issue. He had said that Microsoft had often been naive with regard to the contact needed in Washington to get things changed.
Modernising this idea, how about Eric Schmidt?
The system would be unbelievably easy to cheat. It also would be stupid easy to turn a "startup" into a money laundering scheme.
Don't take this the wrong way: I really wish that there were an easy way to let legit founders into the US. But it just isn't practical.
Let's see:
The INS has their hands full...
PG said: 10,000 people is a drop in the bucket by immigration standards
For comparison, there were 591,050 student and exchange visas granted in 2007 [1]. If the INS can handle checking up on individual students following educations via Universities, they can do the same with 1/200th the number of startups via investment firms.
The system would be unbelievably easy to cheat
Oh, how? And why is accreditation a viable solution for Universities, but not investors?
I really wish... but it just isn't practical
Give one shred of evidence aside from senseless pontification and I might consider it.
1. http://www.studyusa.com/English/articles/visa2.asp
Yes, in terms of people. But you fail to understand that it's an entire new process and system that would have to be invented and executed.
You just don't think like a con-man. Universities have quite a bit on the line, such as accreditation. A private company has next to nothing on the line. Anyway, here's how I'd do it:
1. First off, I'd need to know somebody in the US who has a viable business and would vouch for me. Because immigrant communities support business focused on their interests, this wouldn't be very difficult. Of course they'd agree, because of the benefits for the home country (sending money home, etc.).
2. Have them offer fake investments to me and a pool of founders. Get approved by INS/State.
3. Once in the US, work as I please. Funnel this money back into the "startup" as profits. Plenty of startups can't even turn a profit, so financials wouldn't have to be impressive.
4. Rinse, repeat. The same business would only get approved so many times, but there are tons of businesses here.
Now, for the unscrupulous way (since there's nothing particularly immoral about the previous scenario). Note that I'm for the legalization of drugs, but that's not the point: The US gov't is sure as hell against that.
1. Have associate(s) in the US prop up a shell of a business that appears to be legitimate. Have them offer a huge investment for what appears to be a startup's credible business plan.
2. Move in under an alias with fake documents.
3. Funnel drug money through the "startup," which would be an ideal money laundering node. Because the plan is intended to produce successful businesses, nobody would blink an eye at the eye-popping profits. Just bullshit as much as necessary...if YouTube cooked the books, they could convince people that they were turning $150M profit annually easily. Show your cards as you please, since you're holding the deck.
4. If things get even remotely hot, leave the country. So much money's been successfully processed at this point that it's undoubtedly a net win. Hell, say you're flying to Lima to make a commencement speech on business. Nobody would stop you. The associates could claim ignorance obviously, as you were just some entrepreneur they put their hopes and dollars in. Even if the startup were irrevocably linked to money laundering, you're back home and extradition isn't happening, since you used a false identity.
5. Rinse, repeat with other associates.
"Give one shred of evidence aside from senseless pontification and I might consider it."
Evidence on a virgin immigration plan? I'm sure there's plenty out there!
Let's flip this: Tell me how you prevent either of the two previous scenarious, short of having the gov't handle the entire recommendation/approval process, which would pretty much defeat the purpose.
Sigh ... people are so naive.
The obstacle I see is that the stake of having authority to say who can get visas for work is very high these days (not like student visas); lots of people are seeking ways to get working visas desperately. So there would be lots of political frictions to introduce investor's accreditation system.
But yet, if politicians are convinced that this is crucial to revitalize the economy (which is probably one of the highest priority items), much of such muddling of power games may be avoided.
Accredidation - similar to the way that Universities do.
Sounds a bit like your first thought was along the line of "visa == immigrant == [name your third world country]". There are (still) many people in old Europe or Japan who think that US is a hotter place than home for a startup... and I'm part of them.
It's slowly changing though, I feel it around me : patents and costs of litigation, Sarbanes Oxley (IPO exit... gone ?), visa problems (the lottery thing with H1-B visa). It did hit quite a lot the American dream.
Specially when it comes to opening a branch in the US for small businesses : insurance costs literally explodes, it's harder to send employees to the newly created branch (H1-B is not the only solution, but it was the one that scaled the best), so it's harder to control it.
I used to work in New York City, with an H1-B. When I decided to create a startup I eventually trashed my H1-B and went back home. I didn't want to, but between keeping a day job and doing a startup part-time in the US, or doing a startup full time home, I choosed the latter.
I still think that US would have been much better, and I liked the life there quite a lot too (much more than horrid Paris), but well, my cofounder was in France and could not come... had there been a startup Visa, he/we would have applied, and we would have moved to SF.
Incidentally my former NY employer opened a branch in Switzerland, which is slowly becoming the main office... one of the reasons is the visa issue : it's much easier to move a US citizen to Geneva, than a European citizen to US... So in the end there might be just one marketer remaining in NYC, while it was supposed to be the opposite at first !
(For people wondering my first startup attempt did fail quite miserably... second attempt is faring pretty well so far)
Second, pg's proposal seems to be a more targeted version the of E-1/2 visa with the additional benefit of shifting some of the administrative burden onto the shoulders of investors. So it's probably less work for the INS than the existing E-1/2 process.
Sounds like a pretty good deal for the US tax payer.
On the other hand, it's hard to underestimate the irrationality surrounding this issue.
Edit: What meaningful changes could the Obama administration make without having to go through Congress?
If your goal is to persuade as many people as possible, insulting the previous administration and by extension those that voted for Bush is a bad start. I was already opposed to your idea before the second sentence, despite the fact that I'm an advocate of increased legal immigration.
That said, I didn't really get an answer... you say you're in favor of increasing legal immigration - are you in favor of changing the mix, of do you think that we need to go way above the current level of 1.2+ million a year?
As much as I support your position (I'm an open immigration advocate), the concept of "Let the market decide" isn't exactly a position I hear the government ever clamoring to support. The government wants control, and giving up control is it's antithesis.
Let's suppose there are 2 types of founders: people who have enough money & connections, and the young "live on Ramen noodles" type founders.
For the "money & connections" type, a lot of foreign countries offer cheap but still qualified programmers and don't put too many obstacles on founding companies so if your country is like that it might make sense to stay. For the "Ramen" type, many of them may not afford America's often high living costs.
As for the argument that the US provides a better/more free market... even this is changing: The internet probably allows relatively easy selling to worldwide customers from any country.
All that said, the American dream probably still lives on and many people would likely provide counter-examples to my limited point of view. Of course pg didn't claim that coming to the US is a no-brainer for every single talented hacker. There are probably enough of those who are interested to satisfy the 10,000 founder/year goal.
I think the algorithm PG proposes is something like this:
1. Produce enough that you would be able to convince someone to fund you. Maybe this takes a prototype, a convincing sales pitch, ramen profitability, etc.
2. Convince someone to [seed] fund you.
3. Move to a place with an environment favorable to startups.
4. Continue working on your product, now with access to investors, other founders, good employees, great weather, ...
The idea is to get to step 4 as fast as possible. In most parts of the world you'd never be able to find good investors or a startup-supporting culture, and that counts for lot. As PG has pointed out, there's a huge variance in startup-friendliness even amongst the major cities in the US.