
The Founders Visa Movement - GVRV
http://www.feld.com/wp/archives/2009/09/the-founders-visa-movement.html
======
geebee
Unfortunately, the proposals in this blog entry make me very nervous. I'm all
for making it easier to allow talented people entry into the US, but I hate
the idea of empowering investors to grant green cards. I think Paul Graham is
an inspired investor and a smart guy, but should he be allowed to decide who
comes into the country and who doesn't? Should a panel of credible lawyers,
VC's, and entrepreneurs be allowed to do this?

I think that an employer should be able to offer a _job_ , not US residency. I
think an investor should be able to offer _money_ (and advice, guidance,
support). But not a green card, no way.

Think of the implications here. A young investor really doesn't need the
money. He's ramen profitable. But he needs the investor's permission to be a
startup _in the us_! Well, that's one way for VC's to get the upper hand in an
era when their money doesn't matter as much.

Look, I know hacker news folks tend toward the libertarian side and are
generally skeptical of government. But I want the people who decide to award
green cards to report to the voting public, not to Larry Ellison. I admire PG,
but he doesn't answer to me as a member of the voting public, and he
shouldn't. Once VCs gain control over the immigration system, they assume a
government role, but we can't exactly vote them out of office if we don't like
their decisions. And even if you have faith that PG will be a good guy, do you
feel that way about "credible VCs and lawyers?"

Winston Churchill said "It has been said that democracy is the worst form of
government except all the others that have been tried." Personally, I'm not
all that interested in trying out a regime of VCs, no matter how credible a
panel has found them to be.

As for the "Green cards to all CS majors" idea, I think a very narrow rule
targeting CS would discourage US students from this field, and encourage them
instead to pursue more protected degree paths like law. I'm worried about any
policy that would drive the already low interest in CS among US students even
lower. I also think a University should be in the business of granting
degrees, not US residency.

~~~
fnid
Yep, this part really struck a nerve: _(2) the founder has to own at least 10%
of a company that has raised $250,000 within the same year as the application
for the Visa._

This is a power trip from the VC's it's also a method by which they can
extract more equity from the founder of the company using "coming to america"
as a carrot.

What does raising money have to do with founding a company? This is a stupid
and ego-centric view of entrepreneurship.

90% of VC funded startups fail. 80% of restaurants fail and according to the
SBA, _as a general rule of thumb, new employer businesses have a 50/50 chance
of surviving for five years or more_
<http://www.businessknowhow.com/startup/business-failure.htm>

Seems like it would be better for america if raising money was _not_ a
requirement of being a founder.

~~~
joe_the_user
This is indeed a terrible idea. Every day it seems like I read folks on hn who
are indeed familiar with start-ups and _investment_ but who think they thereby
understand _economics_.

The first thing they often don't understand is how _perverse incentives_ work.
Consider, lots of folks with $250K in the bank would be happy to get a
guaranteed $50K out of it. So they would "invest" (launder) the money into a
_fake_ start-up which would serve only for the "found" to give them back their
$250K plus $50K in return for the "founder" getting a green card.

Just one bad effect of this would be the fake start-ups themselves, which
would pollute the start-up space with starting with more fake craiglist ads on
up.

~~~
petercooper
A book I had about US immigration said that the situation you outline actually
occurred with the E-2 visa for quite some time. That's why the criteria for
the E-2 are so strict now - if the criteria weren't so strict, it'd be the
ideal "founders visa" already. Basically the post is proposing creating a lax
E-2 (of sorts), which already failed once. (Even though people are throwing
around numbers of $500k, etc, for the E-2 - that was certainly not the case
even a few years ago.)

Perhaps the most interesting comment over there is on relaxing the criteria
for the O-1 visa instead. Perhaps instead of being "incredibly famous" you
could just be "well known in your field" instead.. I better keep in the top
100 on Hacker News then ;-)

~~~
potatolicious
My mother managed to get an O-1 actually - and she's not even college-
educated. She's simply quite well known and regarded in her community
(knitting, arts and crafts), and that was that.

Maybe more founders ought to look at the O-1.

~~~
linuxconvert
Bearing in mind that the O-1 is a non-immigrant visa (my friend is on one).

------
linuxconvert
I'm a potential user of such a visa.

As it stands, right now, I'm likely to start a company outside the US. I'll
create jobs overseas instead of here just because of the hassles I've had with
US immigration. I find the situation to be rather illogical.

I'm currently on a H1B and in the greencard queue. Anti-H1B people love to
rave about my taking jobs from US citizens. I get to hear it in person from
time to time because, since I'm white and speak English with an indeterminate
American style accent, people presume I don't object to them bitching about
the Indians and Chinese H1B holders while I wait at the coffee stand.

I'd rather start my own company. I've had a startup before in Europe so I know
what I'm getting into. Then someone else could take my current job. I'm
financially secure (close to $1m cash in the bank in addition to my long-term
investments) but:

\- I want to solve my immigration status and not resort to non-immigrant
temporary visas like E-2

\- I'm not happy to just hand $500k to $1m over to an investment of unknown
risk to get an EB-5

\- There is enough to do while starting up without getting bogged down in
convincing some non-expert in the merits of a business plan and a schedule of
hiring etc.

\- My H1B NIW just got a request for evidence despite my letters of
recommendation from "household names" in my particular industry (sorry to be
deliberately vague).

\- I have a government in another country willing to throw money at me to
startup there

Now I could startup abroad and transfer back and jump thru various hoops that
way. But, frankly, I have a young family and want to build a permanent base
for myself. I rather like Northern California for that but there are many
other nice places in the world as well.

 _shrug_ it leaves me confused as to why the US is so hostile to my intention
to build a home here and create jobs.

~~~
geebee
"Anti-H1B people love to rave about my taking jobs from US citizens."

I'm largely opposed to the H1B visa, but I definitely don't like to rave about
your taking jobs from US citizens. I certainly don't think that you have.

This visa was truly a miserable piece of public policy, and I think the US
should regard it as a failure and try to implement something that is in the
better interest of the American public as well as the people who would like to
work here and would make great contributions.

I read a bit about Australia's points system, and I think it's a good
approach. You get points for having valuable skills, proficiency in english,
and so forth. If you exceed a certain threshold, you get a "visa" (I'm not
sure if that's the term they use, it's a residency and work permit). What's so
cool about this system is that the visa is granted directly to the individual,
so it preserves freedom. I also like it because it doesn't single out high
tech - lots and lots of different professions and trades get full points, so
engineers/programmers won't feel singled out and thrown under the bus, so to
speak. While the needs of employers are a factor (a job offer adds points), it
doesn't give employers control over the worker's right to reside in Australia.

I know you've had a bad time of the US immigration system, and anti-H1B
ranters have given you plenty of opportunity to view critics of the program as
anti-immigrant (and even potentially racist). But I'm hoping you can also
agree that many US citizens who work in technical fields are legitimately
outraged about abuses of this program.

I don't mind at all if you personally disagree that the H1B program has
deterred Americans from entering the field at a time we badly need to ensure a
steady supply from our own population, but I do think you should recognize
that this is a reasonable point of view that can and should be debated.

~~~
linuxconvert
Putting my frustrations to one side, it seems clear to me that there are
problems with the program, there are abuses of the program, and there are
people like me caught in the middle of it all. However, some of the worst
abuses, such as by Indian consulting companies that bring people over and then
don't pay them while they are "on the bench" should be solved simply by
enforcing the existing rules. Anytime you hear some consultant mention "the
bench" there are these types of abuse going on.

Both the Australian and Canadian processes look far more sane to me. The
Canadian one also runs roughly along the lines you mention.

I don't know whether Americans have been deterred from entering the field or
not. However, I do know that in my particular subfield there is a distinct
shortage of qualified people of any nationality.

------
sachinag
If Brad Feld wanted to encourage entrepreneurship, he'd be bothering his
Congresscritters about healthcare reform for 47 million uninsured, not making
a special path to citizenship for a handful of people.

Yes, we lose some startups because of our immigration laws, but we lose far,
far more to job lock-in because of healthcare.

~~~
philwelch
I'm not sure that mandating young, healthy people to spend their own money on
health insurance will make them more willing or more able to start companies.
Health care reform can help, or it can hurt. It really depends.

------
idlewords
I'm surprised this idea passes anyone's laugh test. There are all sorts of
issues here with distorted incentives - if my ability to stay in the US is
conditional on running a company, then I will do everything in my power to
keep the company limping along, and I will be loath to take certain classes of
risks. This seems in tension with the very concept of a startup.

But the more fundamental flaw here is privatizing decisions about citizenship.
I can't think of anything that's _more_ appropriately handled by government.

------
aditya
I like the way the UK/Canada do it. Why can't the US?

You need 75 points.

1) An advanced degree gets you 35. A PhD 50 and an MBA 75 (debatable, but
good)

2) Gross salary over the last year gets you another 30 points (so if you made
above $70k/yr)

3) Age gets you another 20 (below 28)

4) Work experience in the UK and English language qualifications get you
another 10 points

Sure, this may not work for the people straight out of school (you do need 1
year of earnings and any decent dev with a Master's should be able to pull
75k) - but a couple of years of real world experience after school is probably
a good thing, right?

Why does the US tie you to an employer? Probably because the H1-B program was
a way to bring (relatively cheaper) labor into the US.

~~~
nearestneighbor
Let me guess, you are a UK native MBA holder under 28?

Not for nothing, but valuing an MBA higher than, say, a math Ph.D. is a bit
insulting to some. MBAs are just taking jobs from other MBAs, really.

Edit: braino

~~~
geebee
I agree that it's offensive, but it's also honest. If companies are going to
pay MBAs more than they pay PhDs, then they _should_ lose their right to claim
that there's a "shortage" of PhD's!

~~~
nearestneighbor
In my opinion, MBAs are a commodity almost. PhDs may well be unique and
irreplaceable (although not all). Note that Google founders were in a PhD
track, not MBA.

~~~
geebee
Yer preachin' to the choir dude. But if you look at the starting salaries for
MBAs, JDs, and Math PhD's (from top programs), the market signal clearly
suggests that lawyers and MBAs are more valuable than PhDs.

Personally, I suspect this reflects cartel building and market coercion
(lawyers), as well as the reality that finance people can earn large salaries
without actually producing any wealth.

So personally, I do think that math/sci/engineering folks are often far more
valuable than the MBA/JD folks, but I can't get behind any "shortage" argument
until their pay reflects this.

------
jyothi
This is fantastic. And the initiative speaks volumes of why US is the hub of
startups.

I would any day opt to move to US and build a company over there given US is
relatively a superior matured market segment for online businesses and more
than that for the excellent startup ecosystem.

In the past have built products predominantly for US audience including a book
readers community on facebook (which was my baby) that eventually got acquired
by lulu publishing. But now when I am on my own startup I am devoid of deeper
& closer understanding into the market/customers, the US presence to promote
my products and access to funds, mentors and product launchpad.

Recently got a B1 visa to visit US but I was so uncertain of even that given I
am self employed, single, with not much assets and in all ways seem to fit a
potential immigrant in the view of the consulate. I couldn't have thought of
any way to explain the consulate "a regular job" doesn't interest me and I am
not going to take away jobs.

I am sure a lot of entrepreneurs in this part of the world would be blessed
and move to silicon valley following their dreams of building a business and
fortune.

------
nir
%10 of 250k company would simply create a visa for money path.

Getting VCs to sit in a government committee and review thousands of visa
applications seems rather unlikely, and their success prediction ratio is
questionable.

The various legibility profiles I've seen (like those in Canada etc) all seem
to filter out Steve Jobs, Bill Gates, Larry Ellison..

Perhaps a solution is to allow investors like YC sponsor something like H1B
granted to their companies' founders rather than their own employees.

But, is there really a need for all this? Why does anyone have to be in the US
in order to start a company? If anything, shouldn't the web make geography
_less_ of an issue?

------
prpon
Good to see that someone is acting on it. However, the following quote makes
me worried about the bureaucracy.

(1) set up a non-government board consisting of credible VCs, entrepreneurs,
and lawyers to vet applicants.

It probably is a better solution than what PG proposed in his original essay.
"let the market decide. Startup investors work hard to find the best startups.
The government could not do better than to piggyback on their expertise, and
use investment by recognized startup investors as the test of whether a
company was a real startup."

PG's version would eliminate anyone who would bootstrap a startup without
external funding. Brad's is a little inclusive.

I would rather prefer to leave it at "let the market decide."

Any interesting ideas as to how you could convert that statement into an
actionable policy for immigration authorities to follow?

~~~
jdrock
I would feel uncomfortable giving recognizable VC firms a competitive
advantage in this way. If KP gets to select who gets into the US, chances are
they will have a lead on getting to invest in those people.

That said, I also don't like the idea of having a non-government board decide.

------
ujjwalg
Being in the situation myself, I think the implementation Brad is proposing
might not be good in the long run (reasons posted by other users).

IMO, any co-founder of the company who owns more than a particular amount in
the startup and the startup is at a stage where it can afford paying $100k+
salary to the co-founder should be able to obtain a visa. If the startup is VC
funded, even better. But again there should be a complete background check and
the startup business plan should be assessed by an independent committee
before granting a VISA. Also, educational qualifications of the co-founder
should be taken into account like PhDs should get the top most priority.

------
maxwin
I am a (US) college senior and i really want to start a company after i
graduate. But the regulations just make it so difficult for me. It is good to
hear that someone cares enough about this issue to start a conversation.

------
semmons
It's a great idea, and with a reliable vetting process in place, could help
spur US innovation even further.

------
jfarmer
Grant citizenship to anyone who comes to the US and completes a PhD.

~~~
geebee
Thomas Freidman suggested this in "The World is Flat." I liked some things
about this suggestion. It doesn't specifically target engineering or science,
so it wouldn't distort the market, and a Ph.D (I think Friedman included all
doctoral degrees) from an accredited institution is sufficiently rigorous that
I don't think it would be as easy to "game" the system.

But still, there are a lot of things I really don't like about this proposal
as well.

My experience as a grad student in engineering at Berkeley has left me
convinced that these programs are utterly abusive of their students. If
there's a shortage of Americans willing to sign up for PhD's in STEM fields,
these institutions _deserve it_. Plus, starting salaries for PhD's in
science/engineering lag badly behind MBA/JD/MD programs. This would only
exacerbate the situation. And if a Ph.D granting institution is able to award
citizenship along with a PhD, there's pretty much no limit to the abusiveness
they'll get away with. Hey professors - Want to keep your highly trained
poorly paid lab tech around for another year? No problem - you control his
dream of citizenship, so trust me, he'll keep working 80 hour weeks for you
for $22K a year.

When this sets the standard for treatment of grad students, Americans will all
but abandon the field. Expect the already high percentage of foreign students
in PhD programs to jump even higher if this becomes policy.

~~~
linuxconvert
My experience as a grad student in CS at a UC left me with the same
conclusion. I left, in ABD status a year after getting my MS because of the
working conditions. It makes no financial sense to do a PhD in CS unless you
want a pure research or Professorship. I'm significantly ahead financially of
my peers who completed the PhD program and professionally as well due to my
experience.

Of course there are neat ways for PhD holders to sidestep labor certification
to hugely speedup up their greencard applications so I am somewhat being
punished for making the saner professional/financial decision!

