Entrepreneur Stuck In Canada Highlights The Need For A Startup Visa Now

from the this-shouldn't-wait dept

I've publicly thrown my support behind the idea of a startup founders' visa that makes it much easier for foreign skilled workers who want to come to the US to start companies and create jobs to do so. Right now, our immigration policies do not favor entrepreneurs at all. The good news is that this very grassroots movement has actually picked up some steam, with a ton of support from the startup ecosystem around the country. Whether or not that translates to enough political momentum remains to be seen.

To understand just how important this is, here's one story of an entrepreneur who's been working hard to help build a startup in Silicon Valley who, only just this week, has found himself stuck in Canada unable to get back to the US, despite believing he had the proper visa (in this case, an H-1b). The story is depressing, and reminds you of all the ridiculous bureaucracy that people are forced to go through for something that makes no sense:

Just as everything seemed to be going so well, I came up to Vancouver on September 24th to renew my H1b visa and it turns out the approval I got last year is not worth it's weight in paper. Upon appearing for my interview, my previous approval notice was held by the consulate till I furnished a ton of extra documentation from our tax filings last year, to a full report of all employees, all of my bank statements right down to the photographs of our work area (as alien founders we cannot have startups in garages and our apartments, it has to be in real offices).

I worked through the rest of Thursday and all through the night gathering all this evidence.... So after working through the night to get the evidence to the officers the very next day by 11:30 am, I was told that my application would take a week to be reviewed.

My biggest concern is that an LLC due to it's structure doesn't pay a salary to it's members but a guaranteed payment. My attorney has already warned me that this is a slippery slope to start explaining to consular officers when the time comes.

Now leaving aside the exorbitant costs of living in a city like Vancouver for a week, I don't have to talk about what an entire week means in startup terms. This particular week in question, since we're in fundraising mode, I have had to cancel a meeting with Comcast Capital and cannot present at the Plug and Play Expo on Thursday Oct 1st - they were nice enough and believed in our product to pretty much waive the $1500 participation fee, only to realize I can't make it.

It makes no sense that someone like this should be going through this sort of ridiculous bureaucratic process, held back by bureaucrats who don't understand how startups work.

Brad Feld, the venture capitalist who deserves all the credit in the world for taking this concept -- originally proposed by startup investor/mentor Paul Graham -- and actually getting some political interest in it, has a post discussing the momentum and some open questions.

The main open question he brings up is about how investors can "sponsor" an entrepreneur. Basically any qualified venture capitalist or "super angel" who is investing at least $100,000 in a round of at least $500,000 could sponsor a founder. I have to be honest that I'm not sure I agree with this. Why should the visa be dependent on financing? These days, we're hearing about more and more startups that are bootstrapping their way to success, or getting by on much smaller amounts of money. If a founder can build a successful company without raising $500k, should they not be allowed to take advantage of the startup founder's visa as well?

The proposal goes on to have renewal rules, as well, that also are dependent on job creation and raising more money. The job creation bit I can understand, but again I am troubled by the "raising money" bit. Why should the investors be the gatekeepers in determining who gets to be an entrepreneur?

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Supporting A Movement Towards A Founder's Visa

from the this-would-be-good dept

Back in April, we wrote about Paul Graham's excellent idea to create a special startup founder's visa to help allow the founders of startups the ability to come to the US and build their companies here. This is important as studies have shown how skilled foreign entrepreneurs have been vital in building up our tech industry and creating new jobs. A recent study showed that 25% of all tech startups in the US and over 50% of those in Silicon Valley are founded by immigrants. There's simply no reason not to help more immigrants start companies in the US, but our current immigration setup is a mess, and it's quite difficult. I've seen companies fail (and, even was working closely with one many years ago) when a founder had to leave the country due to visa issues. However, after Paul Graham's suggestion, not much has been mentioned.

However, VC Brad Feld says that he's heard from a Congressional Rep who's actually interested in the idea, and he's trying to build up more support behind the idea -- and he's looking for feedback on the concept itself and how to make it a reality. I can't think of a single good reason for us not to encourage more skilled immigration -- especially if it's for the purpose of starting a company. Hopefully, this actually gets some traction.

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Fewer Foreigners Coming To US Grad Schools: This Is A Problem

from the not-good-for-anyone dept

I still cannot understand the antagonism that many seem to feel towards skill foreigners getting jobs in the US. The job market is not a zero-sum game, and there are two important things to understand when it comes to these foreigners:

1. Studies have shown, repeatedly, that bringing in such skilled foreigners helps create new jobs by expanding the economy. In fact, 25% of all tech startups these days are done by foreign-born workers, and in Silicon Valley that number is over 50%.
2. The even bigger point: it's not as if these skilled workers suddenly disappear if they're not in the US. Instead, they remain in their home countries (or other countries) where they're still just as skilled and now more likely to be competing with US companies, who were hindered in hiring the best employees. Getting beat in the market by a foreign competitor isn't good for US jobs. It's terrible for US jobs.

And yet, thanks to the economy and our own immigration policies, guess what's happening? Not only is it incredibly difficult for skilled foreign workers to get jobs, many foreigners aren't even trying to go to US grad schools any more, knowing how difficult it is to get visas and jobs in the US. As many are noticing, this is undeniably bad for Silicon Valley and bad for innovation. Can someone please explain why it's somehow better to let those people compete with US companies, rather than work with US companies to grow them?

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Supreme Court Tells Gov't It Can't Use ID Fraud Laws Against Illegal Immigrants

from the stretching-the-law dept

Apparently, the Federal Gov't has been using an ID fraud law that was passed a few years ago not to go after just those copying the identity of others for the sake of fraud, but illegal immigrants using fake IDs. The two scenarios are entirely different, but the Feds were quick to use the law against the illegal immigrants, as it was an easier tool to use than to go through the standard process of dealing with illegal immigrants. Now, no matter what you think of illegal immigrants and how they should be dealt with, we should all be concerned when the government is stretching the intention of a law beyond its clearly stated purpose... and the Supreme Court seems to agree. It's now told the government that it clearly went beyond the boundaries of the law in using it against immigrants. The court points out that the law is pretty clear that the person charged under the law must knowingly take the identity of someone else, but totally made up IDs don't appear covered by the law at all, because the law isn't intended for fake IDs... it's intended to deal with those defrauding others by taking their identity.

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Time For A Startup Founder Visa

from the let-'em-in! dept

In our various debates about immigration policy in the US, we here have always been in favor of a much more permissive immigration policy for skilled immigrants, noting that skilled immigrants have been shown to create more jobs rather than "take them away." For some reason, too many folks incorrectly think that jobs are a zero-sum game, and if a foreigner takes a job, it means one fewer job for Americans. That's wrong in so many ways that it's difficult to take seriously anyone who makes such a claim. That said, it would be interesting to see what even those opposed to expansions of existing skilled worker immigration plans think about Paul Graham's new suggestion of a special startup founder visa, that would allow 10,000 immigrants into the country, but only if they're starting their own company. Thus, they wouldn't be "taking" anyone else's job, since the job they'd be creating wouldn't exist otherwise -- they'd be creating it from scratch. Such a visa would encourage more entrepreneurial activity, and create more startups that should (in all likelihood) end up creating a lot of new jobs as well -- including a few that might go to those people whining about foreigners "stealing" their jobs...

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The Brain Drain: US Is Losing Immigrants Who Create The Jobs We Need

from the very-dangerous-situation dept

Discussing immigration policy around here is something of a "third rail" item. No matter how many times we explain the importance of bringing smart, educated immigrants into the US, we end up getting a long stream of ignorant comments from people who mistakenly claim that these foreign workers "steal jobs." This is not true. In fact, the opposite is true. Jobs are not a zero sum game. A smart, highly skilled worker helps create new jobs. And... if we hinder them from getting jobs in this country, they end up going to (or staying in) another country, where they compete with American companies, often causing a much greater job loss, as business moves to that foreign company rather than the American company. And yet too many people who can't see past the first move in the chain of events insist that bringing highly skilled foreigners into this country is bad.

Well, they should celebrate, because a growing number of those highly skilled foreigners are going back to their home countries from the US. Despite the fact that these are the folks most likely to create jobs by making companies more successful and starting their own companies, some seem to think it's a good thing that these folks are, instead, creating those jobs and those successful companies elsewhere. If they thought about it, they would realize that by keeping these highly skilled individuals out (or pushing them to leave when they're here) that we're actually destroying American jobs. We're encouraging job creation to happen elsewhere rather than in the US, just because some short-sighted individuals think only about a single job opening, rather than about how job creation and economic growth occurs.

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Appeals Court Tells Homeland Security That Wikipedia Alone Isn't Sufficient Evidence For Refusing Asylum To A Refugee

from the DHS-didn't-realize-this? dept

While I tend to think that Wikipedia is a good thing overall, that's because I know it's not a source that should be relied on by itself for important decisions -- such as whether or not to grant political asylum to an individual. It can be useful as a starting point, if that information can be corroborated elsewhere. Apparently, the Department of Homeland Security felt otherwise in using Wikipedia to deny a request for asylum for a woman. An Appeals Court has now overturned that decision, noting the problems with using Wikipedia as a sole source of info, but the whole scenario should make you wonder. Did DHS really not have the ability to check the legitimacy of the woman's documents without resorting to Wikipedia? What sort of resources are provided to immigration officials that they're making judgments based on a Wikipedia page?

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Would A Skill Ranking, Rather Than A Lottery, Solve The H-1B Visa Problem?

from the only-a-little-bit dept

With the applications for H-1B visas immediately outstripping the Congressionally mandated supply, the "winners" will be chosen by a random lottery that is supposed to be "fair." But, as some are pointing out, that doesn't really make sense for H-1Bs. The whole program was designed to bring in the most skilled workers and get them to work for American companies, contributing to our economy. So, why not create a system that lets them in based on skill level? That's the question asked by a rather balanced Business Week piece, which also notes that recent research has shown "skilled immigrants boost the economy and create jobs."

While ranking people based on skill certainly is better than a pure random lottery, it still has its problems. Figuring out who's higher skilled is tricky -- and the suggestions on the table will favor large companies over small and may give too much weight to mediocre candidates who graduate from top schools over top candidates who graduate from mediocre schools. In the end, as even the author notes, the real issue shouldn't be focused on the details of the H-1B program, but on figuring out ways to get more skilled immigrants into the US, helping to build out the economy and create more jobs. That certainly could involve overhauling the H-1B program -- which clearly has far too many abuses -- but it shouldn't involve keeping foreign skilled workers out of the country. That's a recipe for disaster, that will shrink the job market, by having some of the best workers competing against American firms, rather than working for American firms.

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H-1Bs Run Out Almost Immediately Yet Again

from the april-fools dept

Just like last year, and as pretty much everyone expected, US immigration officials note that they've received tons of applications for H-1B visas -- way more than the 65,000 allowed by Congress, just in the first day of eligibility. That means that they'll switch to a lottery system and, once again, plenty of highly skilled technology talent will be working for foreign competitors rather than US companies. It's truly a shame that so many people in this country seem to incorrectly think that jobs are a zero-sum game. Bringing more highly skilled workers into this country helps create more jobs. The idea that allowing workers into the country decreases jobs here (or even decreases wages) is simply incorrect. Those workers still exist and will still compete with you for jobs -- it's just that they'll be doing it in other countries where they can undercut you even further and put even more pressure on your own company to close up shop. Not allowing skilled workers into this country is a much bigger risk for American jobs than letting them in.

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DHS Declares H-1B State Of Emergency; Allows Foreign Students To Stick Around Longer

from the better-than-kicking-them-out dept

theodp writes "Deeming the possible loss of foreign grads with technical bachelor's degrees a serious threat to the U.S. requiring immediate action on its part, the Department of Homeland Security changed immigration rules without notice or comment Friday to allow foreign students to stay on to work in the States for two-and-a-half years after graduation without needing an H-1B visa."

To clarify a bit, DHS has basically realized that the H-1B visas were quickly used up almost immediately again, and that would cause problems for students who have been here on F-1 student visas, and have recently received jobs in the US. DHS's extension here makes a lot of sense. It only applies to students who recently graduated with degrees in science, technology, engineering, or mathematics (i.e., skilled individuals) who are employed by companies that already review the eligibility of employees electronically with the DHS. Since it's become increasingly difficult to get an H-1B visa, these recent skilled college grads would lose their jobs and get sent out of the country. That wouldn't do anyone any good. It would hurt US companies by forcing them to lose recently hired skilled employees, and it would hurt US competitiveness by having those same students return to their home countries, where they're more likely to work for foreign companies competing against US companies.

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The Battle Over H-1B Visas Heats Up With Conflicting Reports

from the take-your-pick dept

Last year, the supply of H-1B visas given to skilled foreign workers to work in the US, was exhausted after a single day, leading to many calls for the program to be expanded. As we get closer to this year's eligibility period, the expectation is for a similarly quick exhaustion of visas, so it's no surprise to see people rushing out studies that are both pro- and anti- H-1B extension plans. First, comes the controversy over newly released data pointing out that many of the companies who received the most H-1B visas happen to either be headquartered or have much of their operations based in India. Of course, the whole point of the H1-B is that these workers are in the US, so it's not entirely clear why it matters who the firm is. However, it does suggest that this may involve a situation where these firms are abusing the program and are not, as is required, first looking for qualified Americans to fill the jobs. Yet, just because some firms are abusing the program, it does not mean the program itself is a bad idea.

Meanwhile, Slashdot points us to an article claiming that there is no IT worker shortage, as some have claimed. The article is fairly balanced, looking at a few different recent studies that suggest there isn't a shortage -- though, there isn't much of a surplus either. It tries to reconcile the fact that companies are having difficulty hiring workers (which is undeniable) by suggesting that the problem is more with the hiring process than with the labor supply. Of course, that's just one interpretation. Another might be that many of these studies are counting all "IT workers" as equal, meaning that someone with obsolete skills or who is not particularly good, is considered the equivalent of a programming hotshot. The problem many firms are finding these days isn't that it can't find techies, but that the techies they're finding just aren't that good or qualified.

Finally, on the flip side of the coin, a study has come out dismantling the claims that H-1B visas tend to cost Americans jobs. Instead, it found the opposite was true: H-1B visas tend to create more American jobs. This is only counterintuitive if you believe that the labor market is a zero-sum game. However, as we recently noted, it is not. Bringing good workers into the US helps create more jobs here, because successful local companies help grow the economy and require even more workers. This is supported by the study, which found that for each H-1B visa issued by companies, five additional hires were made as well. With smaller companies, it was even more drastic, showing seven new hires. Furthermore, the study dispels the notion that H-1Bs are only used by companies looking to save money. It notes that when companies are facing hard times, they reduce the number of H-1B applications, suggesting that they're not being used to save money. If you've ever gone through all the paperwork (and lawyers fees) needed to hire an H-1B, you'd recognize that it's hardly a cheap or efficient process.

In the end, though, it's not hard to figure out the best path forward. The key is recognizing the simple fact that the labor market is not a zero-sum game. Bringing strong workers into the US, rather than having them compete from overseas, is much more likely to create more new jobs in the US. It shouldn't be difficult to understand this fact, though we always get angry comments from people who have trouble grasping it. It shouldn't be that complex however: if a company is doing well, it will need to hire more people. A company doesn't do well by letting the best available people (the ones who help them do well) work in other countries. This doesn't mean that it's okay for firms to abuse the H-1B process, but we need to separate the abuses (no matter how widespread) from the program itself. The goal should be to get as many smart, qualified workers working in the US, helping to expand our own economy, rather than working against it.

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Isn't It Better To Keep Smart Foreign Workers In The US Than Sending Them Home To Compete?

from the just-wondering dept

It's amazing how short-sighted some people can be on the immigration question. Rep. Zoe Lofgren has a wonderful idea, suggesting that we make it much easier for skilled foreign workers to establish residency if they get a job in the US. It's difficult to see why anyone would oppose this. Keeping those workers in the US, working for US companies, means that they're contributing to the American economy. Sending them home only lets them compete against us, potentially harming the American economy. The argument most often brought up against such proposals, that it hurts American jobs, is easily shown to be false. It's based on the incorrect assumption that jobs are a zero-sum game, and if a foreign-born worker takes a job, it means one fewer job for an American-born worker. Yet, if that foreign worker goes back to his home country and works for a company that takes down an American company, then we have a lot fewer jobs in the US, due to that worker going home. At the same time, if that foreign-born worker stays here, and while working for an American company, helps build up an industry, it will create many new jobs for both foreign and American-born workers.

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'Skills Shortage' Debate Misses the Point

from the competition-is-good dept

Business Week has a lengthy article about the controversy over "worker shortages" and immigrants in the IT industry. The tech industry argues that they're unable to find enough workers with the appropriate high-tech skills. Industry critics counter that the worker shortage is overhyped, and that companies are really just trying to drive down wages for high-tech workers. Frankly, I think both arguments exhibit a woeful ignorance of basic economics. In a competitive market, which the IT labor market certainly is, there's no such thing as a "shortage." Rather, there's a shortage at a particular price. If the number of jobs exceed the number of workers at a given wage, wages will get bid up and some employers will choose to let some non-essential jobs go unfilled. Conversely, if there are more workers than jobs, wages will fall, causing some firms to expand more aggressively than they would have at the higher wage. The number of jobs isn't fixed, it varies depending on how high salaries are.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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US Immigration Office Unable To Understand Internet Popularity

from the wait,-so-you-became-popular-where? dept

In the last few years, we've heard numerous stories of musicians rocketing to stardom, thanks to the internet. In fact, some bands really are coming out of nowhere, with tons of internet support worldwide, even if the band has only been together a short while. Apparently, that's a huge problem for foreign bands looking to tour the US, as the type of visa that US immigration grants to touring musicians requires that those musicians can show that they are "internationally recognized" for a "sustained and substantial" period of time. Unfortunately for internet superstar musicians, US immigration doesn't seem to recognize internet popularity as being "internationally recognized" and the quick rise to popularity hurts on the "sustained and substantial" period of time analysis. The folks in immigration respond that they will consider internet popularity, but since they have no idea if the popularity is real or manufactured, the band needs to prove that the sites that talk about the musicians are popular themselves, first. Even if that's the case, it seems that a few well known UK acts are having an awful lot of trouble getting to the US. Perhaps they should simply show the ticket sales from sold out clubs in the US waiting for them (the article notes that clubs have had to cancel sold-out shows after the musicians were unable to make it to the US). Either way, it's yet another example of how the internet is making old processes obsolete.

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Why Does Congress Want Smart, Highly Educated Workers To Stay Out Of The US?

from the just-wondering dept

Whenever we write about H1-B visas, we seem to get attacked by people who confuse the fact that there are some companies who abuse the program with the overall benefit of getting smart, highly educated workers working for American companies -- rather than against them. It certainly fits with economist's Bryan Caplan's theory that many people have specific biases that blind them to the bigger picture. All four of those biases actually come into play on this issue. The anti-market bias that doesn't recognize the benefits of competition and assumes that protectionism helps an industry, when it actually hurts. The anti-foreign bias that obviously comes into play when people seem to be against immigrants because they're "not American" even if they help the American economy. The make-work bias that falsely assumes that it's better to have people employed right now than creating an economy that will produce more, better paying jobs in the future. And, finally, the pessimistic bias that assumes that because some foreign workers may take a job from a higher paid American, that we're all going to lose our jobs.

The reality is quite different. Competition is what drives innovation and progress. By having competitors, it pushes companies to continually improve their offerings and serve the market with better and cheaper products. That's a good thing. Protecting an industry is a recipe for killing it, as it simply allows foreign competitors to run circles around the domestic players, killing off the international market and making Americans worse off. Second, having smart, well-educated foreign workers working for US companies, rather than for foreign competition clearly helps the American economy by keeping those companies strong and innovating, rather than getting crushed by foreign competition. Finally, if those American companies can do better and create new desired products, they can create more jobs. Jobs are not a zero-sum game.

Unfortunately, these biases are strong and difficult to fight. Politicians driven by polls too often succumb to them. The latest news is that Congress is against letting in more H1-B workers, guaranteeing that those workers will instead go to work for foreign companies -- working against American companies. It's difficult to see how anyone can favor that, but that's the way it is unfortunately. It is true that the H1-B program has been abused by some companies. But the answer isn't to punish the H1-B program, but to punish the abusers.

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