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We Need Immigrant Founders, Not Just Talent

April 13, 2015
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Earlier this summer, thousands of New Yorkers joined forces to voice support for immigration reform. Many of NYC’s tech & startup leaders (USV’s Fred Wilson, AppNexus’ Brian O’Kelley, Gilt’s Kevin Ryan and Tumblr’s David Karp among them) teamed up with Mayor Bloomberg to highlight the problem. The rest of the nation wasn’t far behind; the March for Innovation (#iMarch) sponsored digital immigration reform “rallies” across the nation, all webcast to supporters across the globe. Investors too joined the fray, including John Doerr, Brad Feld, Josh Kopelman, Ron Conway and especially notably, Jeff Clavier.

So why does the tech / startup community care so much about immigration reform? One reason is obvious but bears repeating America needs more STEM experts. A recent report by the NVCA confirmed that 66% of companies feel that current immigration policies are detrimental to American competitiveness. About 75% of H-1B visas go to engineers and demand for these docs have outpaced supply for 9 out of the last 11 years; boosting domestic supply is a separate can of worms (cf. education reform) but the STEM demand is clear. So you can see how tech companies, especially startups who have super-specialized needs, are particularly sensitive on the issue.

What’s less obvious is that it isn’t just a matter of opening the floodgates to foreign talent. That’s well and good, but the more nuanced consideration is that the US needs to remove red tape for more than just employees. We need foreign founders to want to start and grow their business here. It’s inevitable that growing nations will spawn new and successful entrepreneurial communities to rival American ones. We’ve seen things progress a long way with London, Tel Aviv, Paris and Berlin; we’re seeing it grow even faster in new tech capitals like Barcelona, Stockholm, São Paulo and Mexico City. I’m hugely supportive of the internationalized of startup culture, but cringe to think that American startup communities might suffer as a result of misguided policy that takes a short-term view, treating tech immigrant as merely highly skilled talent, rather than as company-builders in their own right. Over the course of five posts I’m going to try to distill a few key areas where we’re failing potential foreign-born startup founders and why we should care. I’ll start by using a clichéd book / movie reference:

1) “The Right Stuff” Is Rare & Takes Time To Recognize: For those of you who haven’t read it (or seen the movie that was made of it), “The Right Stuff” was a book by Tom Wolfe documenting the trials of cutting-edge pilots in the 50s and 60s and their eventual selection (or not) into the NASA program. The right founding management team, like Wolfe’s “Mercury Seven,” is just as much a matter of fit (complementary attitudes and skill sets) as it is about expertise in any one domain; you can’t just manufacture real simpatico amongst founders, and it’s probably impossible to replicate once found. Yet current visa rules are mainly based on employer-employee relationship prerequisites, ignoring the fact that many of the most impactful foreigners are founders (and may even be solo!).

On top of this, even some of the more progressive reform suggestions tie visas to strict funding / job creation milestones, which in their current form make it tough to build a strong startup foundation for a young company. I’m not even a fan of milestone-based tranche financing; how do you hire if you can’t even guarantee nine months of solvency. Imagine if the bogeyman was deportation instead! “Hey, drop your plans to come work for my startup for equity; there’s only a 50% chance I’ll be kicked out within the year!” Yes, we need guidelines and ways to mitigate abuse of the system. But the potential downsides of the current schema are much too great. There’s no supply for a “founder of a new startup” role; one ambitious person comes up with the idea, makes the leap and takes the risk. So why are visas for immigrant founders still as restrictive as they are? Is there some serial startup founder’s union and lobby I’m unaware of? (The thought alone is a little frightening.)

TLDR: Every serious, entrepreneurially minded individual forced to leave the US, or discouraged to move here due to visa-related issues, is a potential Google killed or exiled (Sergey Brin immigrated from the Soviet Union as a kid).