Proponents Say Visa Bill Would Boost U.S Technology Entrepreneurship

A bill recently introduced in the U.S. Senate would allow immigrant entrepreneurs to obtain a two-year visa if they have secured the support of a qualified U.S. investor. Supporters, including bill sponsors Senators John Kerry and Richard Lugar, argue that the measure would help ensure American competitiveness by drawing on global entrepreneurial talent. The bill would also help create new investment opportunities for U.S. venture capitalists.

The current version of the StartUp Visa Act of 2010 would enable an immigrant entrepreneur to receive a two-year visa if a qualified U.S. investor is willing to dedicate a minimum of $250,000 to the new venture. A new category of visa, EB-6, would be created alongside the current EB-5 category. EB-5 visas allow foreign nationals to obtain a green card if they invest $1 million in the U.S. and are able to create ten jobs. The EB-6 visas would be drawn from the current EB-5 pool. If after two years the EB-6 recipient can prove that they secured the original $250,000 in capital and were able to create five full-time jobs, attract an additional $1 million in investment or generate $1 million in revenue, they would receive permanent legal resident status.

An immigration reform bill in the House of Representatives includes a similar provision for immigrant entrepreneurs.

Visa reform for entrepreneurs is favored by many within the TBED and equity capital communities. The National Venture Capital Association approves of the bill, citing its own research indicating that close to half of all venture-based companies were founded by immigrant entrepreneurs. Compete America, a pro-immigration reform coalition including Boeing, Coca-Cola, Google, the Business Software Alliance, Cisco, Microsoft and Texas Instruments, endorses the bill noting that many of the most iconic American technology companies were started by immigrant entrepreneurs.

Read the full text of the bill at: http://startupvisa.files.wordpress.com/2010/02/startup-visa-act_-final-final-1.pdf.

A number of recent studies seem to confirm the importance of foreign startup founders in the U.S. technology economy. A paper by William Kerr and William Lincoln tracks patenting levels in firms and cities based on fluctuations in H-1B visas admissions. H-1B visas allow foreign workers in specialized occupations to obtain temporary work status. The researchers found that decreases in the number of H-1B visas available had a significant impact on patenting levels. The authors suggest that immigration plays a vital role in American innovation, and by increasing visa opportunities, the U.S. can help generate new technologies and jobs.

Read The Supply Side of Innovation: H-1B Visa Reforms and U.S. Ethnic Invention at: http://hbswk.hbs.edu/item/6097.html

In Which Immigrants Are the Most Innovative and Entrepreneurial? Distinctions by Entry Visa, Jennifer Hunt tracks the workforce performance of immigrants relative to natives based on the type of visa they secured to work in the U.S. While older immigrants and immigrants who enter the country with permanent legal residence do not outperform U.S. natives in wages, patenting, commercialization and licensing or publishing, recipients of student/trainee visas and temporary work visas surpass native performance in all of those areas.

Student/trainee and temporary work visa recipients with master's and doctoral degrees are more likely to start successful businesses based on technical knowledge than U.S.-born residents with similar backgrounds. The results suggest that U.S. competitiveness is hurt when foreign graduate students return to their native country.

Read Which Immigrants Are the Most Innovative and Entrepreneurial? Distinctions by Entry Visa at: http://www.nber.org/papers/w14920 (for purchase).