In the few weeks since I wrote the post The Founders Visa Movement there has been a ton of positive momentum, input, ideas, and support. Thanks to the efforts of Dave McClure and Eric Ries, we shifted the name to the StartupVisa, figured out that the EB-5 visa was the most logical one to try to “modify”, and got a web site up about it. In the mean time, I’ve now had extensive conversations with three of my congressmen, all of whom get it, including one who is deep in working on some draft legislation around it. I’ve also gotten a CU Law JD/MBA student to work with us as an intern to help put some substance around the approach and proposal. I’ve also been taken to task by some folks who think I’m naive, misguided, or simply are against increasing the number of legal immigrants into our country.
I have no idea how to address the entire immigration issue in the US. However, I strongly believe that we should make it easy for people to start new entrepreneurial ventures in the US. As a result, the EB-5 is an interesting visa to consider. The simple version is that if a foreign national invests up to $1,000,000 in a US company that creates at least 10 jobs, the foreign national can apply for the visa. This seems backwards to me. Rather than grant the visa to an investor, let’s grant the visa to the entrepreneur. If we change the EB-5 so that foreign nationals starting US companies that are backed by qualified US investors can apply for the visa it seems like we can preserve the general construct of the EB-5 while applying it to a more compelling recipient (the entrepreneur).
From the various conversations I’ve had, the biggest issue – not surprisingly – is figuring out ways to create an efficient and fair evaluation process for the visa that does an effective job of preventing people from gaming the system. In thinking this through, it seems like there are two goals: (1) use as much existing SEC and IRS filings as possible as the basis (so as to not create new filings) and (b) create appropriate thresholds to make the definitions and parameters easy to test and validate.
Following are some items for discussion. This are not a firm proposal, but rather my synthesis of a bunch of different conversations, including an attempt to synthesize the comment threads on the various blogs posts such as Fred Wilson’s that I’ve seen. I encourage an open discussion of these – please tell me why these are constructs or thresholds that won’t work and feel free to suggest better ones. I’m definitely still in “figuring this out mode” and the more input I get – both positive and negative (preferably constructive) is really helpful.
Proposal: An entrepreneur applying for a StartupVisa can be sponsored by a qualified VC or a qualified Super Angel who is investing at least $100,000 in an equity financing of at least $500,000.
Definition of a Qualified VC: Whenever a VC raises a fund, they have to file a Form D indicating that they are a venture capital company and disclosing the amount of funding that has been committed to them. For purposes of the StartupVisa, this form can be amended to include the disclosure that the VC firm is a US-entity comprised of US citizens. To eliminate the chance that anyone can set up a VC fund for this purpose, the VC fund needs to have a minimum amount of capital commitments (say – $5m).
Definition of a Qualified Super Angel: For angels, let’s define a category called “Super Angel”. A “Super Angel” is an accredited investor (as per the SEC accredited investor rules) and has to have made at least five angel investments in the preceding three years totaling at least $250,000.
Duration: The StartupVisa is valid for two years.
Renewal: For the StartupVisa to be renewed, the company needs to either (a) create 5 new jobs every two years, (b) raise at least $1m every two years, or (c) generate at least $1m in revenue and be profitable.
Ok – have at it. What’s wrong with these parameters? How can the system be gamed? What am I missing?
The Startup Visa movement is picking up a lot of speed. I’ve had more positive conversations about it than I have about any other government related thing I’ve been involved in or worked on in the past few years.
David Binetti and the gang at @2gov have set up a way for anyone to make a $50 contribution to the Startup Visa effort. This is an anonymous donation and you have to be a US Citizen to make the donation – just go to the contribute page. If you want to contribute more than $50, just email donate@2gov.org.
Thanks in advance for any and all support.
I received an overwhelming response to my post last week titled The Founders Visa Movement. There were tons of comments – both positive and negative (many constructive on both sides), lots of emails, and plenty of tweets. I sent the comment thread on to the senior staffer in my congressman’s office who I was talking to and got a thoughtful response from him.
I’ve got a series of calls set up this week to talk with several other of my congressmen (and women). In addition, we are in the final stages of getting a CU Law student to intern with us at Foundry Group on this project to help pull together more substantive material, options, data, and support (we hope to announce this next week). There is no question in my mind, after hearing the response and thinking about this more, that the time to do something about this is right now.
This morning I woke up to Eric Ries’ post titled Support the Startup Founder Visa with a tweet. Eric is in DC with Dave McClure and the GeeksOnaPlane DC/Europe 2009 trip. In his post, Eric talks about the Founder Visa idea, discusses an approach to modifying the EB-5 visa, and points to a project called @2gov where you can register your support for this via Twitter.
So – if you want to help and get involved, go take a look at @2gov and tweet away.
In April, Paul Graham wrote an inspired post titled The Founder Visa. In it he proposed the idea of creating a US Visa for founders of startup companies – 10,000 / year for founders of companies that are started in the US. There was some chatter around this at the time (I think it’s a brilliant idea) but then the discussion died down.
I sent the link to Paul’s essay to a few congressmen (congresspeople?) that I know with an offer to discuss it further and give some substantive examples. I just got off the phone with a senior staff member of one of my congressmen who had read the essay and was interested in hearing more.
This issue has come up over and over again – in 2008 I wrote a post titled Solving the H-1B Visa Issue where I suggested that “the US should grant permanent residency to anyone who graduates from a qualified four year university with a computer science degree.” I didn’t put any energy behind this at the time (beyond a blog post) because of where we were in the election cycle.
Now I’m ready. I was hit squarely in the face with this over the summer. Two of the ten TechStars Boulder teams were comprised of non-US founders – two from Canada and two from the UK. Both lived in Boulder for the summer and want to relocate here and build their businesses in the US (and – specifically – in Boulder). Over the summer we struggled to figure out ways to get them Visas – all of the proposed approaches were expensive, risky, and tiresome. Both companies are still trying, but each are now seriously considering returning to their home countries to build their businesses.
I cannot come up with a single reason why this makes any sense from a US perspective. These are young, talented entrepreneurs that have come out of a three month program with amazingly interesting startups. They are in the final process of raising their first rounds of financing. Post financing they will be creating US based high tech jobs. If they are successful, they will create a lot of jobs. Plus, they are young so they will do this multiple times in their lifetime.
It should be trivial for them to stay in the US.
In an effort to flesh out this thinking, a few questions came up on the call.
How Do You Determine If Someone Is a “Founder”? Two easy approaches: (1) set up a non-government board consisting of credible VCs, entrepreneurs, and lawyers to vet applicants. (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.
How Do You Deal With Failure? The founder gets to keep the Visa. Startups fail. That’s part of the experience. Some of the greatest companies were not the “first” that an entrepreneur did. If the entrepreneur doesn’t start another company with a year, then the Visa expires.
I’m looking for more feedback on this as I work with a few people to actually create a movement around this (rather than just an idea, blog post, or essay). So – if you have positive or negative feedback, along with suggestions about how to make this more powerful as a construct, or more palatable to people in our government who will have a negative knee jerk reaction based on “illegal immigration” or “jobs to immigrants” concerns, please weigh in.
I’m really proud of my Congressman Jared Polis. Jared was one of the first people I met when I moved to Colorado in 1995 (we met in early 1996) and have been good friends ever since. Jared has a great article about his first few weeks in Congress up on the CNN website titled Commentary: Congress is like going back to college. There’s also a fun video.
Jared – you look very serious in that suit and tie.
Today’s Washington Post article titled Staff Finds White House in the Technological Dark Ages was no big surprise. However, while I was taking a shower (in a hotel in the Houston suburbs of all places) it occurred to me that this presents an incredible marketing opportunity for Apple.
If I were king of Apple (or say, a board member with deep White House ties), I’d be on the phone with “the appropriate person” with the offer of “a Mac on every desk in the White House along with an iPhone for every White House staffer.” I’m sure there is some law that prevents Apple from giving this away from free so I’d offer it “at cost” just to Mac-enable the White House.
You can’t buy better PR than “Apple computerizes the Obama Administration, displacing ancient PCs running Windows XP.” Plus, the leader of the free world then would carry around an iPhone and a MacBook.
In addition, I see an executive order coming that completely changes the stupid, archaic, and limiting rules about archiving communications within the White House. This is a regular excuse that is used to explain why it’s “hard” to use things like Blackberries if you are president. Baloney – there are plenty of straightforward approaches that solve for whatever you want to do. It’s not like someone archived all of Rumsfeld’s Snowflakes (or maybe someone did – if so – egads.)
While we are at it, did anyone notice that Apple reported record revenues and profits in the quarter ending 12/27/08? Yeah, I guess you did but it’s worth repeating the numbers since all we’ve been hearing is bailouts and losses. These are quarterly numbers. Revenue: $10.17 billion. Net Income: $1.61 billion. These numbers are lower than reality because of the bullshit GAAP rules that force accounting for the iPhone to be reported ratably over the life of the iPhone contract. If you actually accounted for this in a way that made sense, Revenue would be $11.8 billion and Net Income would be $2.3 billion. As every good MBA knows, the key rule is to “follow the cash” which increased by $3.6 billion in the quarter. It’s worth saying again – $3.6 billion. Wowza. Well done Apple.
I’ve been an unabashed Obama supporter for a while. I’m glad he’s going to be our next president and am optimistic about his leadership. I’ve been enjoying listening to some of the punditry ricocheting around about his coming administration now that I don’t have to listen (or – in my case – try to ignore) the endless analysis about the campaign. A few requests on my part have come to mind as I start to synthesize what I’m hearing. Of course, I’m not so arrogant to believe that President-elect Obama – or for that matter – anyone in the administration – will care about my specific requests, but since this is my blog afterall I thought I’d toss my thoughts out into the wild.
1. Appoint Some High Profile Republicans to Your Cabinet. I believe we need to eliminate the extreme partisan divide that exists in the US today. The best way to start to do that is from the top – if President Obama makes it clear that he has no interest in perpetuating the "partisan politics as usual" dynamic, we actually have a chance to start to change it. The biggest, loudest way to send this message would be to get the absolute smartest and most capable people in the cabinet, regardless of their party affiliation.
2. Veto The First Pork Laden Bill. I continue to be baffled by the dynamics around Pork in Congress. I want my politicians to become vegetarians and reject Pork. TARP is such a disgusting example of this – as far as I can tell, the only major difference between the TARP bill that failed the House and the one that came back from the Senate and passed was the addition of a bunch of Pork. Disgusting. When the first bill hits Obama’s desk that has one key issue in it that is covered with Pork, he should Veto it. He should then get on TV and explain the bill in clear English to the American population. He should describe the single issue in the bill, and then list the Pork – state by state, Congressman by Congressman. He should then insist that Congress revisit the bill, take all the Pork out, and send it back to him for approval.
3. Continue Being Confident But Not Certain: Amy and I had a great brunch in Chicago over the weekend with a bunch of folks from Wellesley. The guest of honor was Madeleine Albright (Wellesley ’59) who was the US Secretary of State from 1997 to 2001. Secretary Albright was amazing and it was so humbling to get to spend some time with her. When asked what advice she’d give Obama, she said two things. First – "listen". Second – "be confident, but not certain." She described Bush as a president who has been too "certain" – he’s "certain that he is correct on all issues and then never listens." In contrast, she wants a president who is "confident" yet willing to listen, learn, and adjust his point of view based on the data presented. That resonated with me – being confident but willing to listen is a key tenant of a great leader in my book.
Now – go download Zynga’s Live Poker on your iPhone and play a hand or two. If you made it through this blog post, you deserve a break.
I didn’t come up with this idea – Om Malik did. But he’s absolutely right – Obama needs to look outside the beltway for many key positions, including FCC Chair. Tom Evslin is an absolute star in my book and as Om states:
"Tom Evslin, who is a retired telecom executive, is the kind of person I would expect to be in the FCC. He knows the machinations of the big companies and at the same time is an Internet liberal who can keep broadband providers and their anti-consumer tricks under check."
While Tom graciously responded in his post The Importance of the FCC that "[he’s] flattered although neither a likely choice (that’s an understatement) nor a candidate" help me and Om start a real drumbeat. Obama was elected on a platform of change – let’s bring some completely fresh leadership and thinking into the mix.
Fred Wilson has the best post I’ve read so far from the 700 of so feeds I follow on how he feels about the election. It’s titled Barack Hussein Obama, President of the United States. Fred – like me – decided a while ago to believe in Barack Obama and I’m sure he’s as happy as I am to see him elected president of the United States.
Fred states clearly the six things he thinks we’ll get from an Obama administration.
I won’t repeat the details of each here – go read Fred’s post. But – I’ll add one thing. If you are an entrepreneur, an executive in a company, or in any leadership position at any level, these same six principles apply to you. As Fred so clearly stated, "Like everyone else, I am dying for a leader we can believe in and get in line behind and follow." Reflect on that statement as you go about your day.