After having a few conversations yesterday about the Startup Visa, I realized that I never posted the Wall Street Journal OpEd on the Startup Visa that Paul Kedrosky and I wrote and had published on 12/2/09. I don’t know the rules about reposting OpEd’s – I assume that since we wrote it I can republish it. If that’s not true, I’m sure some one will tell me. In the mean time, here it is:
Start-up Visas Can Jump-Start the Economy
Immigrant entrepreneurs are an engine of jobs and growth. We need more of them.
While fast-growing companies have long been the main source of new jobs and innovation, this country makes it outrageously difficult for immigrants to launch new companies here. This doesn’t make any sense. After all, Google, Pfizer, Intel, Yahoo, DuPont, eBay and Procter & Gamble are all former start-ups founded by immigrants. Where would this country be today without their world-changing innovations?
Immigrants have not only founded big, well-known companies. Foreign-born residents made up just 12.5% of the U.S. population in 2008. But nearly 40% of technology company founders and 52% of founders of companies in Silicon Valley.
Yet we don’t seem to care. We send recent, foreign-born university science and engineering graduates back to their own countries after their student visas expire—unless these creative sorts are willing to spend some of the most entrepreneurial years of their lives working in a big company under an H-1B visa after they finish their studies.
For those who studied elsewhere, but who nonetheless want to bring their job-creating ideas here, American policies treat them—the job-creating, trouble-making innovators that they are—as a cross between deadbeats and queue-jumpers. Why can’t they wait in line like everyone else to get a visa in five years or so? What’s their hurry?
Their hurry is Joseph Schumpeter’s hurry: They want to hustle out and disrupt markets when the opportunity arises.
In the 21st century those opportunities don’t wait for our interminable, employment-based visa programs. As a result rather than saying "Come and create jobs here" we, in effect, tell them to shove off. Come back when you have a few million in sales— at which point they will be rooted elsewhere and creating jobs somewhere else.
That needs to end now. Immigrants who come here to create companies create jobs. We need the jobs.
One good idea to make this process easier is to create a new visa for entrepreneurs, something that is increasingly being called by venture capitalists, entrepreneurs, and angel investors a "start-up visa." It might work like this: If immigrant entrepreneurs want to start a company in the U.S. and are able to raise a moderate amount of money (perhaps as little as $125,000) from an accredited U.S.-based venture capital firm or qualified U.S.-based angel investors, we should let them start a company here. It could be a couple of founders with an idea—that’s it. We would give visas to the founders and welcome them in to our country.
Would it work every time? Of course not. It would fail more often than not. Start-ups often fail.
But having failed, the immigrant entrepreneurs could try again, and again. And as long as they are trying, raising money, creating jobs, and making sales, we would let them stay here. Founders of new companies are precious for a vibrant economy, and we should welcome them. Indeed, the country would be better served to find more of them.
Some will say a start-up visa program will be abused. They will say that it will become a way to end-run immigration rules, to jump the queue if you have money.
There are at least two answers to these objections. First, to get such a visa you would have to raise money from real investors. Second, Canada and other countries already allow entrepreneurs to start a company in their country. Shouldn’t the U.S. stop worrying so much about keeping these people out, and start worrying about bringing them in?
We also think science and engineering graduates should get visas stapled to their diplomas. You complete your higher education here, you get to stay so that you can get out and create jobs, innovate, and grow the economy. Uncle Sam wants you, if you’re a prospective entrepreneur.
The U.S. remains one of the most attractive countries for entrepreneurs. It has a culture of risk taking, capital formation, and an economic dynamism that is the envy of the world. This gives us a competitive edge that we should not let slip through our fingers.