Startup Visa

The Startup Visa is a proposed amendment to the U.S. immigration law to create a visa category for foreign entrepreneurs who have raised capital from qualified American investors. It aims at addressing the absence of a visa category for entrepreneurs raising outside funding. It is currently denominated in congress as the Startup Visa Act of 2011, as introduced on March 14, 2011. The Startup Visa Act has bi-partisan support.

The Startup Visa is a temporary immigrant visa, or conditional permanent resident visa (conditional green card) which converts to a permanent residency (green card) after two years if certain conditions are met.

The prospective Startup Visa is classified as an "Employment Based" visa, under a newly created EB-6 category.

Background

Foreign entrepreneurs who find themselves wanting to start a company in the United States are faced with no or limited visa options. The few visas offering residency and thus a path to citizenship applicable to entrepreneurs are visa categories such as the EB-1 visa, or the EB-5 visa, which were not designed for entrepreneurs in particular, and can only apply to an extremely limited number of entrepreneurs. Employment-based visas such as the EB-2 visa are not viable options for entrepreneurs and can be denied on the ground of the applicant owning significant stake in the sponsor company.

Requirements

The new legislation provides visas to the following groups under certain conditions:^[1]

1. Entrepreneurs living outside the U.S.—if a U.S. investor agrees to financially sponsor their entrepreneurial venture with a minimum investment of $100,000. Two years later, the startup must have created five new American jobs and either have raised over $500,000 in financing or be generating more than $500,000 in yearly revenue.
2. Workers on an H-1B visa, or graduates from U.S. universities in science, technology, engineering, mathematics, or computer science—if they have an annual income of at least $30,000 or assets of at least $60,000 and have had a U.S. investor commit investment of at least $20,000 in their venture. Two years later, the startup must have created three new American jobs and either have raised over $100,000 in financing or be generating more than $100,000 in yearly revenue.
3. Foreign entrepreneurs whose business has generated at least $100,000 in sales from the U.S. Two years later, the startup must have created three new American jobs and either have raised over $100,000 in financing or be generating more than $100,000 in yearly revenue.

The investor must be a qualified venture capitalist, a “super angel” (U.S. citizen who has made at least two equity investments of at least $50,000 every year for the previous three years), or a qualified government entity.

Use of existing visa numbers

The Startup Visa does not allocate any new visa numbers but draws from unused numbers out of the EB-5 visa category (investor green card) which is limited to 9,940 visas, of which only 4,191 visas were used in fiscal year 2009.^[2]

The office of Senator Lugar stressed the following statement "The creation of new visas is not authorized in this bill."^[3]

In perspective, the U.S. admitted 1.13 million new legal permanent residents in the US in 2009, of which, only 12.7% were admitted through a selective process or "Employment-based" categories.^[4]

Legislative history

Startup Visa Act (2010)

Introduced in Senate on February 24, 2010, the Startup Visa Act of 2010 was left to expire in the Judiciary Committee at the end of the 111th Congress with no further legislative action having been taken on it.

Startup Visa Act of 2011

In a second attempt, the Startup Visa Act of 2011 was introduced in Senate on March 14, 2011. However, it was again left to expire in the Judiciary Committee at the end of the 112th Congress and not enacted.

Startup Visa Act of 2013

The Startup Visa Act of 2013 has been introduced in the Senate on January 30, 2013 and is currently awaiting Committee review. It has to undergo a review with the respectives Judiciary committees and the Immigration subcommittees of the Senate and the House. According to Govtrack.us, "The majority of bills and resolutions never make it out of committee".^[5]

Support

American Investors

A group of prominent American investors have been spearheading the Startup Visa since its inception and created the website StartupVisa.com:

• Brad Feld
• Dave McClure
• Eric Ries
• Fred Wilson
• Manu Kumar
• Mike Speiser
• Paul Graham
• Paul Kedrosky
• Reid Hoffman
• Shervin Pishevar

Many other investors have officially pledged their support.^[6]

Groups

These groups are known to support the Startup Visa (incomplete list):

• US Chamber of Commerce's Center for Entrepreneurship^[7]
• Silicon Valley Leadership Group
• American Bar Association
• Partnership for a New American Economy^[8]
• Women 2.0^[9]
• National Venture Capital Association^[10]
• Sign the Startup U.S Visa Petition^[11]

Entrepreneurs

Foreign entrepreneurs who have experienced the US immigration system as entrepreneurs are overwhelmingly supportive of the bill and have been increasingly joined by American entrepreneurs.^[12]

Citizens

The supporters of the Startup Visa are putting forward job-creation, benefit to the economy and innovation leadership to get voters' attention. The San Francisco-based startup Votizen launched in March 2011 featuring the Startup Visa, allowing citizens to directly send a support message to their representative about the Startup Visa.^[13]

The Obama Administration

While the Startup Visa enjoys bi-partisan support and the White House have been repeatedly voicing support to principles relating to it, the Obama Administration have not been aggressively pushing the Startup Visa Act, even through the Startup America initiative, introduced in January 2011. During a conversation hosted by The Economist on March 24, 2011, Aneesh Chopra, the United States CTO, responded the following to Vivek Wadhwa's question about the Startup Visa: "The President has been emphatically clear, his support for high-skill immigration, but to do so as part of a broader, comprehensive immigration reform program".^[14]

This approach has drawn criticism from some supporters of the Startup Visa who see the White House as wanting to delay the bill for an undetermined length of time in order to include it in a Comprehensive Immigration Reform broadly covering legal and illegal immigration, viewed as politically "toxic" for the Startup Visa Act.^[15]

In the Media

Some actual immigration mishaps which the Startup Visa hopes to address have been covered in the documentary film Starting-Up In America, released on February 28, 2011.^[16]

Alternatives

Blueseed

A company called Blueseed aims to create a startup community located on a vessel moored in international waters near the coast of Silicon Valley in the United States. The promoters believe that the location would enable non-U.S. startup entrepreneurs to work on their ventures without the need for a US work visa, while living in proximity to Silicon Valley and using relatively easier to obtain business and tourism visas. This workaround has been compared to the Startup Visa as it aims to accomplish similar goals. Craig Montuori, an evangelist for the Startup Visa, writes of Blueseed that "I can vouch for their passion on creating workarounds for jobs creating foreign entrepreneurs while waiting for Congress to create a Startup Visa as someone who has been advocating for Startup Visa for the past year."^[17]

In other countries

In most of the developed countries other than the United States, entrepreneurs are not facing the same scope of immigration issues because of the availability of point-based visa systems, and/or the absence of ownership restrictions on self-sponsored employment visas.

Since the first introduction of the Startup Visa Act in 2010, these countries have additionally implemented specific visas modeled after the Startup Visa:

• United Kingdom^[18]
• Chile^[19]

Similar movements have emerged in the following countries:

• Canada^[20]
• New Zealand^[21]

References

External links

• StartupVisa.com
• [http://thomas.loc.gov/cgi-bin/query/z?c112:S.565: Full Text of the StartUp Visa Act of 2011]