The current immigration framework is very unkind to non-U.S. citizen entrepreneurs. As roughly half of all the Silicon Valley startups have at least one foreign-born founder (http://tinyurl.com/249rh3w) this is a major issue in the greater San Jose and San Francisco Bay area.
Unfortunately I sometimes come across individual clients with fantastic tech ideas, enthusiasm, goals, and passion for their work who do not fit into what I like to call the “Entrepreneurial Big 4”. This refers to the E-2, L-1, H-1B, and O-1 visas which round out the only real non-immigrant visa options for tech entrepreneurs. For those who do not fit into one of these four visa options, which happens more often then many people who do not go through the process themselves might believe, have to return to their home countries where they then go on to launch their ideas and the U.S. losses out.
This is a brief summary of why the current “Entrepreneurial Big 4” visa options are often very challenging for startup entrepreneurs:
E-2 Visa: This treaty investor visa can be used by investors and employees from particular treaty countries. The problem comes in when individual entrepreneurs are not from one of the qualifying treaty countries which include India, China, and a multitude of other countries. Additionally, the E-2 visa does not provide a pathway to a green card for E-2 visa holders which means that an E-2 visa holder, who potentially invests a large sum of money, creates U.S. jobs, helps innovation, pays taxes, and contributes to the local and national economies as a whole, does not get the benefit of choosing to become a U.S. permanent resident. This is an absolute travesty.
L-1 Visa: Although the L-1A visa does provide the pathway to a green card which the E-2 visa does not, it requires the newly formed U.S. company to be related in ownership to a foreign entity. This is something that is extremely rare in the silicon valley tech industry. This shows that the L-1 visa is actually intended for large and well established organizations and in no way is in existence to help innovation and business creation from within the U.S.
H-1B Visa: This visa is almost not worth mentioning as this year all the H-1B visas were used up within a 5 day period. That’s right. For the entire year, all the H-1B’s were used within five days! Accordingly, any individual who wants to be in the U.S. on an H-1B visa will have to wait until April 1, 2014 before filing a case. Is that really a good way to encourage bright, innovative, and driven foreign nationals towards developing businesses in the U.S.? Apart from the ridiculously low numbers of H-1B visas the USCIS has also taken a frustrating approach to the employer/employee issue when entrepreneurs attempt to use the H-1B “speciality occupation” visa to be eligible to develop their companies in the U.S. The USCIS does not recognize that a corporate entity is separate from its owner and instead often challenges these cases, arguing that an entrepreneur using an H-1B is self petitioning him or herself. The USCIS releases memos saying this is not possible, then they release policy updates and “Entrepreneur in Residence” materials appearing to encourage these applications (http://www.uscis.gov/portal/site/uscis/eir) but yet the same challenges and concerns arise, which not only make H-1B visas unpredictable but also make eligibility for a green card unpredictable at best when trying to move from an H-1B to a green card.
O-1 Visa: The O-1 visa has emerged as one of the fallback options for certain entrepreneurs however the O visa requires “extraordinary ability” proven through an established record of achievement and success in one’s industry. This is obviously not always available to first-time entrepreneurs. Does this mean that tech entrepreneurs and others do not have worthy and valid business ideas? Are we saying that succesful entrepreneurs need to first have launched other successful startups elsewhere? This is logically flawed. Or are we saying that entrepreneurs must be recognized abroad first before they could possible have a worthwhile new venture? This is obviously ridiculous.
Accordingly, as can be seen by a review of the “Entrepreneurial Big 4” visas that current exist for tech entrepreneurs are extremely maladapted to the realities of the startup culture in the local Silicon Valley and San Francisco areas.
On a brighter note, covered in the next blog post, I will discuss the apparent realization by some in congress that the current visa options are not nearly sufficient as I will review two startup visa options in the Senate Immigration Bill (S. 744).
To get involved in helping support the push for reform, specifically related to entrepreneurs, visit Mark Zuckerberg’s FWD.us (http://www.fwd.us/).