5 ms·

Why the U.S. needs a new visa for foreigners who want to start businesses here.

79 points by zugumzug 16y ago

tomjen3 16y ago
Hopefully that won't pass. If you have to get 250k under that law (versus 500k-million under the already existing immigration law) then it isn't going to help startups at all, the only thing it is going to do is to prevent a real startup visa law from ever being passed. A real startup law would not put capital requirements on the company but would require its founders to be able to live of the income and to either hire people or grow a certain amount each year, which some checks to prevent them from being consultants.
- cletus 16y ago
  I think you misunderstand current law. Current law allows for investment-based immigration, meaning that if you have a certain amount of money to invest in a business you can be granted a conditional green card based on the idea that you'll be creating jobs. The startup visa would allow foreign entrepreneurs to come to the US if they could secure funding from legitimate angels and VCs. The first situation allows foreign nationals with foreign money to establish businesses (and residency) in the US. The second allows US residents to establish businesses with foreign entrepreneurs, which is almost the exact opposite of the first.
  - chesser 16y ago
    Let's say someone comes over to start a start-up. Who exactly are they going to hire? The competition is already super tough for getting good help. The talent pool is limited, so this seems rather zero-sum. The kind of people you want already have jobs, so this isn't creating any. And startups are uncertain enough without adding that the CEO is here on a temporary visa. It's going to be even tougher to hire people. I can see it as a nice thing to do on an individual level (so people with dreams who just weren't born here get a better shot at them), but is there a compelling case outside of that? The majority of startups and small businesses are completely expendable and interchangeable as far as society is concerned; "Most small businesses exist to provide the owner's family with an upper-middle-class lifestyle." http://www.reddit.com/r/programming/comments/dgdgw/single_vs_cofounders_its_like_star_wars/ http://www.reddit.com/r/programming/comments/dgdgw/single_vs... I know it's great for an individual to have a successful Facebook game, but why should society care?
swombat 16y ago
I don't understand the funding requirements... Take someone like patio11, who's running a profitable business but not making a killing with it yet. Why not let him immigrate to the US, and run his business (and pay his taxes) there? And what about someone who ran and sold a successful business in, say, Germany, and decides they would like to live in the Valley for a while. Let's say that person has a couple of hundred thousand dollars of wealth, is a proven bootstrapping entrepreneur, and wants to move to the Valley and bootstrap the next Facebook... Why stop them at the border? Many valuable people want to move to the US, but by making it so damn difficult, the US misses out on enormous amounts of top talent. Why not, instead, make immigration a straightforward process for anyone with some set of criteria, e.g. recognised science education or other degree from a top university, or track record of entrepreneurship, all of that with good credit score and no debt ... it makes sense to have entry requirements, but why are they so arbitrary?
- cletus 16y ago
  As for the small(er) business argument, there are a couple of factors: 1. This visa isn't meant to solve every problem. As soon as you try to solve every problem, you've just guaranteed you're not going to solve any problem; and 2. Arguably someone who is small isn't yet of interest to the American government in terms of being a taxpayer. As for the successful investor example you've made, you've chosen a (quite deliberate, imho) strawman. The argument has several holes: 1. If you have $1m or more to invest in a business, there is an existing green card program for that; 2. I believe you know this, which is why you've said a couple of hundred thousand. The line has to be somewhere. 5-10 years ago, at least for tech companies, $1 million probably made sense. Does it make sense now? Maybe not. If not, address it by changing the requirements for that separate visa class; and 3. The American government has a vested interest in fostering businesses of American citizens and residents rather than those of foreign residents; and 4. If that person was going to seed invest (ie become an angel), a couple of hundred thousand isn't really enough to do that. Each "bet" they make, even if only $25,000 is simply too high a portion of their total investment pool. As for the requirements being arbitrary, that's a double edged sword. Sure $1m is enough for an investment-based green card. Why not $950,000? Again, the line has to be drawn somewhere. After all, you're a minor up until you turn 18. Is someone 17 years and 11 months old so vastly different? The positive side of arbitrary requirements is that they have certainty. Someone can look at those rules and clearly know what they mean and whether or not they qualify. To give you a counterexample, in Australia the ATO (our equivalent of the IRS) has a discretionary test to decide whether you're "in business" to see if you can manage your tax deductions in a certain way. It's completely vague, sort of a "you'll know it when you see it" kind of test. The problem of course is that there are still grey areas and humans need to make decisions about whether a given situation qualifies or doesn't. At least arbitrary rules are clear.
devmonk 16y ago
From what I've seen so far this year in bills pushed by the House and Senate that had provisions to assist small businesses and entrepreneurs that have C-corps were weak at best. The originally proposed health legislation pushed by Reid and many other Democrats would have hurt small businesses hard, so they had to tone it down. Finally, a good bit of what I saw in Democratic campaigning this Fall seemed nationalistic, complaining that Republicans were sending jobs overseas, and implying that these Democratic candidates valued Americans getting jobs over foreigners. So, someone try to change my mind and prove to me why Reid and Kerry would be for legislation that would make it easier for foreign entrepreneurs to be successful in the U.S.? Sure Dick Lugar is a Republican, but this post seems to push the idea (imo) that Democrats want to help foreigners make money and that they are pro-small business, neither of which I have seen much evidence of recently. I don't believe Republicans will be loads better, btw. Small businesses and entrepreneurs aren't the most influencial lobbyists in the world, and while angels and VCs have some pull, the only reason they are getting attention now is because supporting small business and entrepreneurs is a politically popular idea.
dustintownsend 16y ago
The Startup Visa Act and Dream Act are crap. Why do we insist on building on our broken immigration policy? We need to make immigration simple for all immigrants. We don't need to create more laws that require an immigrant to spent $100K in legal fees to some lawyer to fill out paperwork. I think YCombinator has proven that a startup doesn't need tons of funding to get an idea going. The biggest problem with government is they over complicate EVERYTHING! We need simple solutions to the problems, not another stack of laws to add to the (literal) truck load that already exists. We need one (1) page form that someone can fill out to get a visa. If someone comes from Mexico (for example), they should be able to fill out this form and get a Visa the same day. If someone flies in from Germany they too should be able to fill out this one page form and get a visa right at the airport. There is no reason why someone should have to have $100K in funding for a business, another $100K for legal fees just to get in. I think the approach should be applied to everything government does. Simplify, Reduce, Eliminate. Another good example is paperwork to start a business. I should be able to fill out a simple form and be able to have a business up and running (Legally) in any city/state in the US - the same day I fill out the form. I don't understand why places like New York City make these kinds of things so difficult. It takes MONTHS to get a business LEGALLY up and running in a major city like New York, but that same business can be LEGALLY up and running in 1 day in Hong Kong.
- techsupporter 16y ago
  While you're right that Y Combinator (or, rather, companies it has sponsored) has demonstrated that minimal funding is required, there is no harm in a government trying to secure the best for its citizens. Nothing says the United States, Canada, Germany, France, Australia, Japan, China, India, or any other nation on the planet must make it easy for an immigrant to enter and establish a business. Least of which, establish a business that requires minimal presence and that can direct its expenditures to any other country. Put another way, if you were the Minister of Immigration, would you prefer to have the cloud-based start-up with 4 employees, two of whom want to live in your country, or do you want the datacenter that has millions of $currency_units worth of equipment that can't easily be forklifted out of the country? To address your second point, without making any pass at politics: Someone once said that states are laboratories of democracies; therefore, each state conducts its internal affairs differently. Michigan allows the formation of a Limited Liability Company with nothing more than the payment of $175 to the state and an online form (ironically, the link to that form appears broken at the moment). Texas is more expensive--$325 for a LLC or a corporation--but offers the same thing. Both states have minimal requirements for non-residents forming and operating corporations under those states' laws, so if NY doesn't suit your needs, there is "something for everyone," even when creating a business entity.
known 16y ago
Clinton successfully faced Outsourcing with Insourcing. Obama is trying to counter Outsourcing with Protectionism.

79 points by zugumzug 16y ago

Hopefully that won't pass. If you have to get 250k under that law (versus 500k-million under the already existing immigration law) then it isn't going to help startups at all, the only thing it is going to do is to prevent a real startup visa law from ever being passed. A real startup law would not put capital requirements on the company but would require its founders to be able to live of the income and to either hire people or grow a certain amount each year, which some checks to prevent them from being consultants.

cletus 16y ago
I think you misunderstand current law. Current law allows for investment-based immigration, meaning that if you have a certain amount of money to invest in a business you can be granted a conditional green card based on the idea that you'll be creating jobs. The startup visa would allow foreign entrepreneurs to come to the US if they could secure funding from legitimate angels and VCs. The first situation allows foreign nationals with foreign money to establish businesses (and residency) in the US. The second allows US residents to establish businesses with foreign entrepreneurs, which is almost the exact opposite of the first.
- chesser 16y ago
  Let's say someone comes over to start a start-up. Who exactly are they going to hire? The competition is already super tough for getting good help. The talent pool is limited, so this seems rather zero-sum. The kind of people you want already have jobs, so this isn't creating any. And startups are uncertain enough without adding that the CEO is here on a temporary visa. It's going to be even tougher to hire people. I can see it as a nice thing to do on an individual level (so people with dreams who just weren't born here get a better shot at them), but is there a compelling case outside of that? The majority of startups and small businesses are completely expendable and interchangeable as far as society is concerned; "Most small businesses exist to provide the owner's family with an upper-middle-class lifestyle." http://www.reddit.com/r/programming/comments/dgdgw/single_vs_cofounders_its_like_star_wars/ http://www.reddit.com/r/programming/comments/dgdgw/single_vs... I know it's great for an individual to have a successful Facebook game, but why should society care?

swombat 16y ago

I don't understand the funding requirements... Take someone like patio11, who's running a profitable business but not making a killing with it yet. Why not let him immigrate to the US, and run his business (and pay his taxes) there? And what about someone who ran and sold a successful business in, say, Germany, and decides they would like to live in the Valley for a while. Let's say that person has a couple of hundred thousand dollars of wealth, is a proven bootstrapping entrepreneur, and wants to move to the Valley and bootstrap the next Facebook... Why stop them at the border? Many valuable people want to move to the US, but by making it so damn difficult, the US misses out on enormous amounts of top talent. Why not, instead, make immigration a straightforward process for anyone with some set of criteria, e.g. recognised science education or other degree from a top university, or track record of entrepreneurship, all of that with good credit score and no debt ... it makes sense to have entry requirements, but why are they so arbitrary?

cletus 16y ago
As for the small(er) business argument, there are a couple of factors: 1. This visa isn't meant to solve every problem. As soon as you try to solve every problem, you've just guaranteed you're not going to solve any problem; and 2. Arguably someone who is small isn't yet of interest to the American government in terms of being a taxpayer. As for the successful investor example you've made, you've chosen a (quite deliberate, imho) strawman. The argument has several holes: 1. If you have $1m or more to invest in a business, there is an existing green card program for that; 2. I believe you know this, which is why you've said a couple of hundred thousand. The line has to be somewhere. 5-10 years ago, at least for tech companies, $1 million probably made sense. Does it make sense now? Maybe not. If not, address it by changing the requirements for that separate visa class; and 3. The American government has a vested interest in fostering businesses of American citizens and residents rather than those of foreign residents; and 4. If that person was going to seed invest (ie become an angel), a couple of hundred thousand isn't really enough to do that. Each "bet" they make, even if only $25,000 is simply too high a portion of their total investment pool. As for the requirements being arbitrary, that's a double edged sword. Sure $1m is enough for an investment-based green card. Why not $950,000? Again, the line has to be drawn somewhere. After all, you're a minor up until you turn 18. Is someone 17 years and 11 months old so vastly different? The positive side of arbitrary requirements is that they have certainty. Someone can look at those rules and clearly know what they mean and whether or not they qualify. To give you a counterexample, in Australia the ATO (our equivalent of the IRS) has a discretionary test to decide whether you're "in business" to see if you can manage your tax deductions in a certain way. It's completely vague, sort of a "you'll know it when you see it" kind of test. The problem of course is that there are still grey areas and humans need to make decisions about whether a given situation qualifies or doesn't. At least arbitrary rules are clear.

devmonk 16y ago

From what I've seen so far this year in bills pushed by the House and Senate that had provisions to assist small businesses and entrepreneurs that have C-corps were weak at best. The originally proposed health legislation pushed by Reid and many other Democrats would have hurt small businesses hard, so they had to tone it down. Finally, a good bit of what I saw in Democratic campaigning this Fall seemed nationalistic, complaining that Republicans were sending jobs overseas, and implying that these Democratic candidates valued Americans getting jobs over foreigners. So, someone try to change my mind and prove to me why Reid and Kerry would be for legislation that would make it easier for foreign entrepreneurs to be successful in the U.S.? Sure Dick Lugar is a Republican, but this post seems to push the idea (imo) that Democrats want to help foreigners make money and that they are pro-small business, neither of which I have seen much evidence of recently. I don't believe Republicans will be loads better, btw. Small businesses and entrepreneurs aren't the most influencial lobbyists in the world, and while angels and VCs have some pull, the only reason they are getting attention now is because supporting small business and entrepreneurs is a politically popular idea.

dustintownsend 16y ago

The Startup Visa Act and Dream Act are crap. Why do we insist on building on our broken immigration policy? We need to make immigration simple for all immigrants. We don't need to create more laws that require an immigrant to spent $100K in legal fees to some lawyer to fill out paperwork. I think YCombinator has proven that a startup doesn't need tons of funding to get an idea going. The biggest problem with government is they over complicate EVERYTHING! We need simple solutions to the problems, not another stack of laws to add to the (literal) truck load that already exists. We need one (1) page form that someone can fill out to get a visa. If someone comes from Mexico (for example), they should be able to fill out this form and get a Visa the same day. If someone flies in from Germany they too should be able to fill out this one page form and get a visa right at the airport. There is no reason why someone should have to have $100K in funding for a business, another $100K for legal fees just to get in. I think the approach should be applied to everything government does. Simplify, Reduce, Eliminate. Another good example is paperwork to start a business. I should be able to fill out a simple form and be able to have a business up and running (Legally) in any city/state in the US - the same day I fill out the form. I don't understand why places like New York City make these kinds of things so difficult. It takes MONTHS to get a business LEGALLY up and running in a major city like New York, but that same business can be LEGALLY up and running in 1 day in Hong Kong.

techsupporter 16y ago
While you're right that Y Combinator (or, rather, companies it has sponsored) has demonstrated that minimal funding is required, there is no harm in a government trying to secure the best for its citizens. Nothing says the United States, Canada, Germany, France, Australia, Japan, China, India, or any other nation on the planet must make it easy for an immigrant to enter and establish a business. Least of which, establish a business that requires minimal presence and that can direct its expenditures to any other country. Put another way, if you were the Minister of Immigration, would you prefer to have the cloud-based start-up with 4 employees, two of whom want to live in your country, or do you want the datacenter that has millions of $currency_units worth of equipment that can't easily be forklifted out of the country? To address your second point, without making any pass at politics: Someone once said that states are laboratories of democracies; therefore, each state conducts its internal affairs differently. Michigan allows the formation of a Limited Liability Company with nothing more than the payment of $175 to the state and an online form (ironically, the link to that form appears broken at the moment). Texas is more expensive--$325 for a LLC or a corporation--but offers the same thing. Both states have minimal requirements for non-residents forming and operating corporations under those states' laws, so if NY doesn't suit your needs, there is "something for everyone," even when creating a business entity.

known 16y ago

Clinton successfully faced Outsourcing with Insourcing. Obama is trying to counter Outsourcing with Protectionism.