America can't be the world's tech leader without immigration reform.

The intersection of government and technology.
Sept. 14 2009 3:47 PM

Give Me Your Tired, Your Poor, Your Startup Founders

America can't be the world's tech leader without immigration reform.

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The restrictive quotas aren't the only problem with the H1-B program. That particular visa is open only to people who want to work for established American companies; their visas would expire if they started their own companies. Indeed, getting to the United States to start your own company is very difficult. The E2 visa program, the most straightforward way for founders to come to America, is closed off to many tech entrepreneurs. For one thing, it often requires that the immigrants provide a huge outlay of capital, sometimes hundreds of thousands of dollars. What's more, the program is open to a select list of countries that have treaty agreements with the United States. India is not among those nations, even though, according to Wadhwa's research, one-quarter of all immigrant-founded tech firms were started by Indians.

The tech world brims with stories of new companies that have failed or decided to relocate elsewhere because of visa restrictions. Investor Brad Feld wrote recently of two firms he funded that were co-founded by people in Canada and the United Kingdom. These entrepreneurs have gone through the final stages of starting up their companies, including raising capital. "It should be trivial for them to stay in the U.S.," Feld wrote—but it wasn't. After looking into a variety of risky and expensive ways to stay in the country legally, both companies are looking to move back to their founders' home countries.

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To be sure, Graham's Founder Visa plan could use some fleshing out. How would the government decide which immigrants really are serious founders of companies? Graham and his fellow V.C.s argue that startup investors decide. Feld, for instance, suggests that the government should set up a board of investors, entrepreneurs, and tech lawyers who are used to vetting tech ideas; they'd review applications and choose which ones are worthy of a Founder Visa. That sounds a bit unwieldy, and it would seem to invite corruption, giving a few select investors special access to new tech talent. A better plan might be to have foreigners apply to V.C.s with their best ideas, then let the V.C.s bid on each of the 10,000 slots—what folks in the Valley would call a "market-based solution."

But there's time for the details to be ironed out; Graham's basic idea is sound. As the Economist pointed out recently, the United States is the world's most entrepreneurial nation, in part because it has long been extremely hospitable to immigrants. Americans don't have a monopoly on good ideas—but wouldn't it be best for America if everyone with a good idea were free to implement it here?

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