In my last post about the Startup Visa, I was very critical of the Kerry-Lugar legislation. That's because it required immigrant entrepreneurs to raise at least $250,000 in financing for their startups, of which $100,000 had to come from American VCs or Super Angels. Few startups raise this kind of seed money -- even in Silicon Valley. I couldn't foresee this bill generating more than a few dozen jobs. Yet our political leaders would have claimed "Mission Accomplished," and we would have lost a valuable opportunity to stem the brain drain.
I was delighted to receive an e-mail, last week, from Garrett Johnson, who works for Senator Richard Lugar (R-Ind.). Garrett said that the Senator had read my articles and asked his staff to consider my comments. After consulting with Bob Litan, of Kauffman Foundation; Brad Feld, of Foundry Group; Eric Ries, of the lean-startup movement; and other champions of the visa, Garrett had revised the legislation. He sent me a draft of the bill that was introduced today. This new legislation is even better than I had hoped for. If it gets through both houses -- and doesn't have bureaucratic constraints -- I expect it to unleash a flood of entrepreneurship.
The new legislation provides visas to the following groups under certain conditions:
The investor must be a qualified venture capitalist, a "super angel" (U.S. citizen who has made at least two equity investments of at least $50,000 every year for the previous three years), or a qualified government entity.
The really good news is that this enables foreign students and workers who are already in the U.S. to qualify for a visa. The requirements for them are very reasonable -- they must show that they have enough in savings not to be a burden to American taxpayers, and get a qualified investor or a government entity such as the Small Business Administration to validate their ideas by making a modest investment.
Yes, there is a risk for holders of this visa that, if their venture fails or doesn't go anywhere, they must start again or leave the U.S. But that's entrepreneurship -- there are no guarantees. This won't appeal to everyone, and it is not meant to. The Startup Visa is for risk takers.
This version of the bill will, I expect, encourage tens of thousands of workers trapped in "immigration limbo," and foreign students who would otherwise return home after graduation, to try their hands at entrepreneurship. Many of these people would not otherwise have considered entrepreneurship; they will now have the incentive to take the risk.
Even though the bill doesn't allow visa holders to work for any company other than their own, I have no doubt that the anti-immigrants will rally against it. They always do, regardless of what is good for the country and of what is good for them. They fear competition and will make claims that these startups will, somehow, take their jobs away.
But the fact is that skilled immigrants create jobs; and recipients of the startup visa will not be allowed to stay in the U.S. permanently unless they do. Right now, these job creators have no choice but to take their ideas and savings home with them and become our competitors. This legislation allows them to create the jobs here.
A lot of hard work has gone into this bill, over the last two years, by tech notables Brad Feld, Eric Ries, Dave McClure, Manu Kumar, Shervin Pishevar, Fred Wilson, and Paul Kedrosky. This group is launching a campaign to gain the bill political support. It is using social-lobbying tools powered by Votizen to take tweets, Facebook posts, and SMS messages and hand-deliver them to Congress. The Startup Visa website details how you can get involved and help the bill to succeed. Now it is your turn to speak up and help us revitalize the economy.
This post originally appeared on TechCrunch.
Follow Vivek Wadhwa on Twitter: www.twitter.com/vwadhwa
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The Startup Visa: Create Jobs, Get A Green Card
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This is a huge boost for the rich.
It is a mystifying question why they receive such shabby treatment in return by way of not being able to secure a more secure status, given LPR status would enable them to develop and grow their businesses in a more confident and strategic manner.Currently their planning is restricted by the length of their current visa.........never more than 5 years.
Perhaps Kerry,Luger,& Udall would like to explain why there is a need for this new visa as opposed to modifying/improving the current legislation that the 140,000 E2 owners already live with.
Why in the Era of Cutting is this $$$$ available ?
It won't create jobs. End of story. If anything we should be abolishing the job-killing H-1b visa. This visa, for readers who aren't aware, is the preferred visa of offshore outsourcing companies from India - like Infosys, Wipro, and Tata. These foreign companies actually sponsor more H-1b visa holders than all other American companies, and use the program to send jobs offshore.
Also, the H-1b worker is a defacto "indentured servant" because workers are sponsored by a corporation - that has very strong controls over them (can revoke sponsorship). Well, I guess this bill would allow them to buy their freedom. The whole program is an insult to our American values, and supports the oppression of others.
H-1b is direct federal interactive in the labor market. Nothing more, nothing less.
However, even if you were being treated great let's do some basic math. Prevailing wage is defined (if you read the law) as being less than market wage. Although the H-1b requires "prevailing" wage it is so low that we find programmers who could qualify for food stamps.
For the sake of argument, let's assume you were paid "market" wage. Great. However, you just increased the supply of labor by 1. Let's multiply that by 85,000. If spread across the entire US workforce, that would probably not be significant.
Let's concentrate 50% of that in one occupation: IT and do the same every year (these are 6 year visas, with 1 year extensions thereafter). If you know anything about supply and demand, you know that this has a major impact on demand. That's 255,000 in an occupation of just over 2 million - and people like Whadwa want the cap raised. We don't know exact numbers because our government is doing such a great job tracking who comes and leaves the country, but that is probably a very conservative number.
If you artificially inflate the supply of labor by 25% in an occupation, it will have a major impact on wages. That's exactly what they did to our profession. It met business interests, not our interests.
Like the rest of legal immigrant Americans do
Just a thought ~ ~ ~ ~ rather than provide more "special" programs to aiding & abetting for illegal foreign nationals residing / working in the USA illegally
8 U.S.C. § 1324 : US Code - Section 1324: RE: aiding & abetting illegal aliens
Mr. Wadhwa is talking about none other than legal immigrants. They cannot get LPR status due to obsoleted and strange rules of the government. This is not about special programs for illegal aliens, but a way for legal aliens who want to work for their LPR. Hope that helps
We should all be very suspicious of any plan to help Americans that involves more labor in the market. Wages are based on supply and demand. The more supply there is the lower the wages are.
It's corporate communism to demand federal interference in the US labor market.
After reading this 9:39PM post, now I know you never were.
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This is how
New startup = a temporary employment agency disguised as a consulting company
An advocate for more H-1b will put up the $20,000 to invest in the NEW temporary employment agency
1st Year
Entrepreneur or Sole Proprietor is employee contractor number #1
1) H-1B foreign-born worker
$55,000 per year salary draw (Equivalent on hourly basis)
$70,000 per year is what client will be charged, saving cilent $30,000/yr on benefits
2) Contractor #2
Foreign-born grad of SciTechEngineeringMathCompSci major
$55,000 per year salary draw (Equivalent on hourly basis)
$70,000 per year is what client will be charged, saving cilent $30,000/yr on benefits
Total revenue made after 12 m>--------------------------------------------------------
According to the above, the following is satisfied
1) More than $100,000 per year in revenue is generated
2) Each has income of at least $30,000
3) They have an investor that puts $20,000 into new temp agency
4) Company like Microsoft is a client for 2 years
That's it. They have qualified for visa to remain in USA indefinitely
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> Profitable to startup even though it is not a requirement
> Employers across USA become clients to save money on not paying any benefits (Health insurance, dental, 401K, anything...)
> Employers across USA become clients to lowball wages to all professional occupations
> No limit to how many the new startup can hire as a contractors to replace Americans
The strategy will be used to displace Americans from ANY professional occupation
+ Engineering
+ Scientist
+ Accounting
+ Network Engineer
+ Financial Analyst
+ IT departments
+ Etc.
If it was not unique to me, I suggest to others that you wait for Microsoft and HuffPost to sync
Perhaps Oracle Sun Microsystems did not communicate with Microsoft on IE9 regarding Java?
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Correction
Above states "Total revenue made after 12 m"
Should of been:
Total revenue made after 12 months EQUALS $140,000
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Can we not use an equal sign any longer?
Either open borders or very limited immigration based on lottery. Anything else leads to corruption.