The recent standoff over U.S. immigration reform has centered on undocumented workers or their children. But there's another set of immigrants whose futures have been put on hold: foreign-born entrepreneurs. A "startup visa," proposed in various forms in stalled bills in Congress, would open the borders to business builders from abroad. But the Washington impasse means that efforts to create such a visa have gone nowhere. Jason Wiens, policy director at the Ewing Marion Kauffman Foundation in Kansas City, Missouri, explains why that hurts U.S. entrepreneurs, too.
1. Why should American entrepreneurs care? In an increasingly global economy, Americans will be competing with foreign entrepreneurs no matter where those companies are physically based. So why shouldn't we reap the collective benefits of encouraging immigrants to start businesses here?
Immigrants are disproportionately entrepreneurial--in fact, about 20 percent of this year's Inc. 500 companies were started by foreign-born founders. New business owners help strengthen the overall economy by generating economic activity that benefits everyone: creating jobs, paying taxes, spending to set up their companies, and buying homes for themselves.
Some startups also rely on a team of founders that includes international talent. So if a foreign-born founder can't come to the United States, the American entrepreneur stands to lose. Ask the Americans employed by companies such as fitness device manufacturer JayBird and cloud services provider Nimbo; I bet they'll tell you our country benefits by welcoming people with entrepreneurial talent and desire.
2. How would startup visas work? It depends. in Canada, for example, immigrant entrepreneurs seeking startup visas must meet four requirements, two of which are the ability to communicate in either French or English and completion of one year of college or the equivalent. In this country, the ground rules would depend on the policy goal. If the goal is to create jobs, the requirements should be generous enough that they allow many immigrant entrepreneurs the chance to do so. Ideally, the ground rules would also recognize the realities of starting a company. For example, most new businesses don't receive venture capital investment right away, so requiring an immigrant entrepreneur to secure VC backing to qualify for a visa would exclude many potentially high-impact immigrant entrepreneurs.
3. Why are the critics of startup visas so wary? There's fairly broad support for this idea, though some are afraid that immigrants would use startup visas only to gain easy access to the U.S. without any real commitment to making the desired economic impact. But starting a business is no sure proposition, and it seems unlikely that many immigrants would stake their chance at U.S. citizenship on a business unless they believe in what they're doing.
A few existing visas are sometimes referred to as startup visas, including the EB-5 visa. But that's meant primarily for investors, who are generally required to commit $500,000 to $1 million to a company that creates at least 10 jobs within two years. That's a very high bar. There's also the H-1B visa, but it requires sponsorship by an American employer. Someone with a startup visa would be held to certain eligibility requirements tied to creating and running a business, not to working for someone else. As an entrepreneur, a startup visa holder would be creating jobs.