Immigrants Started Half Of Top U.S. Startups

(By Sarah McBride - Reuters) - Immigrants founded or cofounded almost half of 50 top venture-backed companies in the United States, a new study shows, underscoring some of the high stakes in potential immigration reform.

The venture capital community argues the study, completed by research group National Foundation for American Policy, proves the need to overhaul rules governing how entrepreneurs can immigrate to the United States to spur job development.

"It's a gamble whether an entrepreneur should stay or leave right now, and that's not how the immigration system should work," said Mark Heesen, president of the National Venture Capital Association, on a call with reporters. "What we need is legislation that helps these entrepreneurs from outside the United States."

Of the 50 top venture-backed companies, 23 had at least one immigrant founder, the study found. In addition, 37 of the 50 companies employed at least one immigrant in a key management position such as chief technology officer.

Companies with immigrant founders include some of Silicon Valley's hot start-ups, such as textbook-rental service Chegg, founded by Indian Aayush Phumbhra and Briton Osman Rashid; online craft marketplace Etsy, founded by Swiss Haim Schoppik; and Web publisher Glam Media, founded by Indians Samir Arora and Raj Narayan.

The countries that supplied the most founders included India, Israel, Canada, Iran and New Zealand, the study found, and the immigrant-founded companies created an average of 150 jobs.

The study looked at the top 50 venture-backed companies as measured by research firm VentureSource, based on factors such as company growth and the amount of capital raised. VentureSource considered only companies valued at less than $1 billion.

Young companies and their backers say the rules are too cumbersome and encourage non-U.S. citizens to launch start-up businesses elsewhere, or bog down companies in red tape if they commit to basing in the United States.

One obstacle to the loosening of immigration rules for entrepreneurs is a tendency in Congress to consider legal and illegal immigration jointly, Heesen said. Because illegal-immigration issues are so divisive, he said, overall immigration reform has bogged down.

The NFAP identified bills pending in the House of Representatives and the Senate that would help through measures such as lowering the amount of capital an entrepreneur has to raise before being eligible for an immigrant visa.

(Reporting by Sarah McBride; Editing by Steve Orlofsky)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[The Startup Expert]

10:09 AM on 12/22/2011

I would be really frustrated to see our government spending more time legislating around how best to help immigrant entrepreneurs. I am an immigrant to the USA myself, and a successful entrepreneur--I founded The Startup Expert, www.TheStartupExpert.com and specialize in helping entrepreneurs break six figures fast. I am also a proud US citizen after 16 years in this country. I want to make one thing very clear: The reasons so many immigrants succeed in the US are:

1. We mostly come from places that have vastly less legislation and simply do not have a habit of playing by the rules. This is great for entrepreneurial spirit!
2. We come to this country to make a fresh start and have fire in our belly and a huge desire to succeed. Never under-estimate the power of raw desire.
3. We are often leaving a living situation that is far more difficult than the USA environment. I left a crime-torn post apartheid South Africa behind me. I was very excited and honored to be in the USA and highly motivated to succeed, so I did not have to leave.

The rules and laws in the USA have been totally irrelevant in my success here. I suggest this is the case with most immigrant. Our government has bigger things to focus on.

Tommi Wolfe
The Startup Expert

[spytheweb]

08:01 PM on 12/21/2011

These are legal immigrants i take it? Because illegal aliens are not legal to work in the US. BTW China is still going to be the world's largest economy by 2016 and nothing the US does is going to slow that down.

[JoblessInJersey]

03:51 PM on 12/21/2011

I came across a great writeup about what a lie all this "we need more foreign high tech workerss" is:

"There is No Labor Shortage in the United States. None, and that includes high skilled labor.

In 2010, there were 3,531,000 computer & mathematical related occupation workers. Yet in 2008, there were 3,676,000. In just this occupational category alone, the United States is down 145,000 jobs, or -4%. The same is true for engineers and architects. In 2010 there were 2,619,000 people employed in these occupations, yet magically, in 2008, average, there were 2,931,000, another drop of 312,000 jobs, or -10.6%!"

You can read more at: http://economicpopulist.org/content/great-worker-shortage-lie-alive-and-well

[Mitchg1947]

02:18 PM on 12/21/2011

Yes, indeed...LEGAL IMMIGRANTS!!!!

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[lumleyq45]

01:09 PM on 12/21/2011

GET YOUR ADS OUT OF OF HERE.

[Norm]

06:47 AM on 12/21/2011

So how many start-ups are venture capital backed?

[newtexan503]

12:33 AM on 12/21/2011

Give The Sioux of Montana the same amount of money given to Isreal, the Sioux won thier war to against America, Like the bagin boys did.

[newtexan503]

12:25 AM on 12/21/2011

WHO BACKED THE PEOPLE? WORLD BANK ? MEXICAN IMMIGRENTS CAN'T AFFORD NEW CARS IN MEXICO BUT NAFA AGREEMENT HAS WORLD BANK BACKING! REINSTATE THE DRAFT AND WATCH THEM GO HOME. ( MEXICAN INQUISITION OF AMERICA).

[Clamarce]

02:27 PM on 12/21/2011

At least we, the immigrants (not immigrents) learned to spell, while you stilll struggling with English. Fortunately, there are no many American ignorants like yourself in this country. YOU are now a minority in your own birthplace.

[Michael D Ballantine]

08:00 PM on 12/20/2011

It's nonsense that immigrants are not vital to our economy. Those on the right who seek to limit immigration need to take a good look around them and see all the hard work that immigrants are doing. Immigrants built this nation and immigrants are crucial to continued growth. If we limit participation, ultimately we limit our growth as all those smart motivated people go somewhere else. It's time we stood up for all Americans including those without the right paperwork. There are 12 million Americans waiting for us to get our .... together and treat them with equality. They are our neighbors, our friends, and our children.

[AMF400]

10:26 PM on 12/20/2011

Hurray ! Finally something that is not bashing immigrants at large :0)
I bet there are a lot of folks like me, that weren't born here and have to built their business from ground up. Scratch, literally and succeeded. We are part of this fabric and our offspring will bring all the emphasis and global potential of a diverse background entails. We selected the option to be Americans, not just happened to be born here. We all value that.
Let's bring those 12 million to the light, everyone living for 10 years or more already decided to stay here, nonetheless most are well employed. An immigrant just can't be without work, while some naturals relay on the Gov. safety nets (nothing wrong with that).
I'm sorry if I felt way short of 1 billion in a start up :0), but I know so many immigrants with small businesses all over California.
Thanks for the post and insight Michael!

[Michael D Ballantine]

12:29 AM on 12/21/2011

You can only hide 12 million people in plain sight. It's not like they aren't working, people gotta eat. My solution work permits for everyone that can get an employer to sponsor them. One year the first round and three years the second round. Charge a $250 processing fee and issue them a visa. It's cheaper than deporting everyone and now the government gets to collect legal tax money. Why shoot ourselves in the foot by wasting billions deporting people that are happy to work here? It's time for pragmaticism not idealism.

[voyager48]

01:07 AM on 12/21/2011

Illegal immigrants should not be vital to our economy since any country that cannot pay a living wage for menial work is patently unsustainable. This is the worst ponzi scheme in history and totally unfair for all concerned.

Without a reliable means to regulate who is here all other arguments are moot since the ponzi scheme will keep on rolling right along. This means that regardless of the intent it is an enforcement issue first and foremost, which automatically puts illegals off sides.

Not too many people I know have a problem with legal immigrants. We admit over a million legal immigrants per year so it is definitely not a case being anti immigrant. Experience in the EU has been that skilled immigrants bring buoyancy to the economy not unskilled laborers. But if a case can be made that we need migrant or immigrant labor them, then why would we not let them in?

But we are coming at this thing exactly backwards and until we can effectively enforce immigration ALL other arguments are moot.

[voyager48]

06:49 PM on 12/20/2011

"It's a gamble whether an entrepreneur should stay or leave right now, and that's not how the immigration system should work," said Mark Heesen,

If they are here legally - where is the problem????????

We are coming at this thing exactly backwards by letting the pro-illegal lobby muddy the water by making illegals synonymous with legal immigrants. EU experience has been that skilled immigrants bring buoyancy to the market by developing products, processes and businesses which in turn create jobs. Not unskilled illegal immigrants.

[llwlknsn]

05:40 PM on 12/20/2011

So what. Reasonable legal immigration has never been the issue. UNREASONABLE illegal migration has been the problem and continues to be so. There are ethnic agendas at work here and both political parties are deleverging constitutent representation in order to chase a myth. If you don't want to start up a business in the US and hire US citizens to work, then get the hell out. We won't miss you at all. On the other hand if you want to build up this country and HIRE AMERICAN, you are welcome and we are glad to have you. Don't come to this country expecting all the benefits and none of the responsibility.

[AMF400]

10:32 PM on 12/20/2011

dear llwlknsn,
Unreasonable undocumented immigration is a economically phenomenon. The free market demand and open many jobs for all this people who all cross the desert. You can't stop the supply/demand of this capitalist society, but you must regulate. We need a better guest program that allows people to come and go. We only have this mess because congress won;t act and only demand border security and other talking points without going to the root of the issue. Blame the congress, not the job seekers nor the employers.

[JoblessInJersey]

04:01 PM on 12/21/2011

Why should we "solve" the immigration problem by handing out more work visas?

The better solution for American workers would be to have fewer workers. An oversupply of workers leads to lower wages and high unemployment. Between outsourcing and immigration levels that are too high, we are training American employers to expect people to work longer hours for less pay and benefits and to prefer foreign workers to American workers.

Lots of jobs have been lost over the past 30 years due to automation and outsourcing.

I don't see how we're going to create enough good paying jobs for ourselves, much less for tens of millions of additional immigrants and their kids, grandkids, and so on down the line, forever.

[usa77]

05:28 PM on 12/20/2011

WE ARE ALL IMMIGRANTS IN AMERICA! wake up and read history you stupid democrats

[60s Dem]

05:55 PM on 12/21/2011

Meet my immigrant Chinese friend, usa77, he's Mr. Fuh Q.

[spytheweb]

08:15 PM on 12/21/2011

"WE ARE ALL IMMIGRANTS IN AMERICA!" We are not all illegal aliens. No country wants illegal aliens.

[usa77]

04:12 PM on 01/05/2012

obviously! then why did 140 million people vote for someone that wants more illegal immigrants

[dterraman]

05:25 PM on 12/20/2011

....there will soon be even more from India and China, the caps have been removed from the work visa from those countries.....soon they too will see through the illusion perpetrated by our money changers and the government that is bought

[AMF400]

10:33 PM on 12/20/2011

Yes, maybe you right. Would you mind to get a good paying job from an immigrant from India ?

[dterraman]

07:47 AM on 12/21/2011

no prob working for immigrant, own my business....the point is...he too will soon come under the same anti business attitude of gov man

[D-Driller]

04:50 PM on 12/20/2011

"Immigrants Started Half Of Top U.S. Startups"
"Immigrants founded or cofounded almost half of 50 top venture-backed companies in the United States"
"Of the 50 top venture-backed companies, 23 had at least one immigrant founder"

Let's discuss. The tagline of the story leads one to believe that, indeed, 50% of top US startups are owned by immigrants. Amazing. The next line tempers that, by saying that "almost" 50% were founded by or had a cofounder who was an immigrant. Not as good, but not bad. The last line then says that of the companies that were starter with VENTURE CAPITAL, not all startups, just the ones with VC, less than half were founded or cofounded by immigrants. Nice to see, but hardly the story I expected.

[JoblessInJersey]

05:08 PM on 12/20/2011

Yeah, it turns out that native Americans can still do something.

That's not what some want you to believe.

I have no doubt that there are talented people around the world and I am not opposed to allowing some high tech immigration to occur.

But what I find is that companies who talk about immigration want lots of it, and don't seem to care about getting American students into American colleges or American workers into American jobs. That's what gets me real mad.

[arimoore]

08:00 PM on 12/20/2011

Since you're concerned about what Americans want, please don't call the descendants of colonists and immigrants "native" Americans. That term is reserved for the indigenous people who lived here before white people invaded.

[Norm]

06:43 AM on 12/21/2011

These stories are all like that; you have to read very carefully. It gets to be a strain.

[edmundavolio]

04:49 PM on 12/20/2011

Since unemployment is still increasing, along with all other ills from high unemployment, should indicate that small startups won't ever be the answer. The only answer is for Congress to mandate that products SOLD in the US be made under the same requirements of products MADE in the US. Any other attempted solution in the last several years has not made an impact on unemployment and nothing but the above will.

[AMF400]

10:36 PM on 12/20/2011

oh well, tell Apple to stop building a factory in South America, and start doing that here...We can't legislate the free market.

[edmundavolio]

09:50 AM on 12/21/2011

You are correct but Congress can legislate under what conditions products sold in the US must be made. It is not a big leap to suggest that if Congress can make rules for what is made in the US, they should make the same rules apply to what is sold in the US. As it stands now, the congressional mandates for MADE in the US are killing jobs and the US Economy.

[JoblessInJersey]

04:04 PM on 12/21/2011

We could have a value added tax or tariffs though.

We need fair trade, not free trade.