Why Startup Visas Don’t Go Far Enough

Washington and Silicon Valley haven’t had much time for each other over the years. It’s been a clash of cultures between two very different worlds that simply ends up rubbing everyone up the wrong way.

For example, when Google’s senior team turned up in Washington for the first time, they were snubbed thanks to their uniform of jeans and T-shirts – turns out Capitol Hill doesn’t have much time for rollerblading billionaires. And only last week Yahoo boss Carol Bartz said the best thing DC could do to boost the economy was to stop interfering with it.

So it’s heartening to see that dotcom entrepreneurs can schmooze the Hill when they need to: as in the case of the Startup Visa crew, who visited Washington last week to campaign for changes in immigration law that they say will benefit the NewNet… and the US economy as a whole.

The problem (as they see it) is that while many would-be entrepreneurs migrate to the United States with the dream of launching a technology startup, visa restrictions mean that only a few of them ever manage to start a company.

That’s because most technology-minded immigrants arrive as academics or employees, something that leaves them tied to an organization for years before they can branch out on their own — all the while being less productive and less innovative than they might manage on their own.

It also means that plenty of entrepreneurs who would have moved to America are now thinking carefully about their situation and staying home. We all know that the pace of innovation and brainpower in Bangalore, Beijing and Brasilia is increasing rapidly, but even in old, slow Europe the same change is happening: London’s technology scene is blossoming, and many former Eastern Bloc countries are developing an aggressive form of high-tech capitalism.

The Startup Visa solution is to give budding founders the chance to obtain a visa usually reserved for business investors. In particular, the proposal suggests widening the EB-5, an immigrant investor visa, which currently requires the applicant to invest at least $1 million in U.S.-based business, creating at least 10 jobs.

Instead of those restrictions, advocates suggest that the EB-5 should be available to anyone who can raise money, not just those who already have deep pockets. Under the plans, anybody able to raise at least $250,000 of investment — of which $100,000 must come from inside America — would be eligible.

It’s a good solution which already has the backing of some high-profile investors, venture capitalists and politicians – not least former presidential candidate John Kerry.

But here’s the problem: It doesn’t go far enough.

More accurately, those pushing forward the idea need to make sure every corner of the United States understands why the startup visa matters. Because while there are important high-tech businesses all over the country —Massachusetts, Illinois, Texas and elsewhere — the gravity centers around the Bay Area and Seattle. It’s great that the movement has energetic investors from outside the West Coast bubble, like Brad Feld, who runs his affairs from Colorado, New York’s Fred Wilson, or Paul Graham, whose Y Combinator group started in Boston. And it’s great that fantastic people such as Dave McClure and Manu Kumar are not only pushing forward the idea, but turning up to meetings in Washington, D.C., wearing suits and playing the Capitol Hill game.

However, the message that America needs to get is that the startup visa is something that will create jobs across the country, and not simply in the handful of states that have already grasped the high-tech industry.

Pragmatism is important because immigration (even if it creates jobs) is such a hot-button topic that people will need a lot of cajoling to be convinced that this isn’t an already over-moneyed industry demanding another slice of pork. And if that perception — rather than the reality — is what ends up sinking the proposals, then the idea’s advocates might as well have turned up wearing T-shirts and scooting around on rollerblades.

Question of the week

Do you support the proposals for a startup visa?