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You Should Be Able to Immigrate to America If You Have a Really Good Idea for a Startup

A new policy could give immigrants leeway to stay in America if they're working on a successful startup company.

by Ted Hesson
Sep 7 2016, 6:19pm

Sergey Brin, the co-founder of Google, immigrated to the United States from Russia. Photo by James Duncan Davidson via Wikimedia Commons

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Henry Chen has all the ingredients for a successful tech startup: innovative ideas, a funding plan, and a foothold in Seattle, where it's easy to connect with talented programmers.

There's just one problem: his visa status.

In 2009, Chen left his hometown in Hefei, China—about 2.5 hours west of Shanghai by bullet train—to study in a doctoral program at the University of Missouri. He didn't complete the doctorate but graduated last year with a master's degree in computer and electrical engineering. Plus, he already had several projects underway, including an app that would allow real estate agents to scan homes with a smartphone and create virtual tours.

His student visa gave him permission to live and work in the US for a year after graduation, and he's now applying for a two-year extension available to graduates who specialized in science, technology, engineering, or mathematics. After that, though, his future is uncertain.

"Sooner or later, I still need to change my visa if I still want to keep doing my business in the US," Chen told VICE.

Henry Chen

Immigrants like Chen make a big difference in the US economy: Over half of the country's so-called unicorns—companies worth $1 billion or more—have foreign-born founders, according to a March report by the National Foundation for American Policy. And many founders of prominent companies were born abroad, including Sergey Brin (Google), Hamdi Ulukaya (Chobani), and Max Levchin (formerly PayPal, Yelp).

So last month, the Obama administration proposed a new rule that could offer a workaround for people like Chen. The measure would allow startup founders to stay in the country for two years if they can attract at least $345,000 from qualified US investors or $100,000 in grants from a government entity, a length of time that could be extended by an additional three years if the project continues to generate revenue, attract investment, or create jobs. The funding requirements can also be partially fulfilled if the startup can present "compelling evidence" of its potential for rapid growth and job creation. Under the draft rule, an applicant would initially need to own at least 15 percent of a recently formed company and play an active role in its operations.

The proposal is based on existing immigration law, which allows the Department of Homeland Security to offer parole (temporary permission to be in the country) based on either urgent humanitarian need or "significant public benefit." In this case, the administration is arguing that entrepreneurs who create jobs will contribute to the well-being of the country and satisfy the "public benefit" requirement. There's no limit to the number of immigrants who would be able to stay in the US under the rule, but the Department of Homeland Security estimates that 2,940 entrepreneurs would be eligible each year, plus 3,234 spouses and children.

"If you look historically, immigrant entrepreneurs have played a really important role both in creating great companies and creating jobs here in the United States," said Tom Kalil, a deputy director at the White House Office of Science and Technology Policy, in an interview with VICE. "The best and brightest from all over the world come to US universities. They may have ideas for starting a business in the United States. Our view is we should make it easier for them to do that."

Related: Not Everyone Is Happy About the Influx of Foreign Workers That Could Soon Hit Silicon Valley

President Obama pushed for Congress to create a "startup visa" during his time in office, but legislation stalled despite bipartisan support in both the Senate and House of Representatives. The economic benefits seemed clear enough: A 2013 report by the nonprofit Kauffman Foundation, for instance, found that a startup bill introduced in the Senate would have added between 500,000 and 1.6 million jobs over ten years. Nevertheless, the visa idea died in Congress.

The immigration standstill in Congress led Obama to announce a series of executive actions in November 2014, which included the promise to tweak existing immigration policy to encourage innovation and entrepreneurship. In late August, the Department of Homeland Security followed up on that commitment, releasing the draft rule that will likely go into effect later this year, after public comment and any related revisions.

The startup visa isn't a very contentious topic in the world of immigration policy—it's certainly no border wall. But groups such as NumbersUSA, which advocates for significant cuts to both legal and illegal immigration, have opposed startup visas in the past. The organization wrote in a recent blog post that the new rule would "challenges the limits" of discretion at the Department of Homeland Security, comparing the move to President Obama's attempt to give deportation relief to millions of undocumented immigrants, an effort blocked by the Supreme Court in June.

While the startup measure may face some limited opposition, it has a vocal cast of supporters, including FWD.us, the tech-minded immigration lobbying group created by Facebook's Mark Zuckerberg in 2013. The organization—which spent an average of $600,000 per year lobbying elected officials from 2013 to 2015, according to the influence-tracking website Open Secrets—hosted several roundtable discussions during the drafting process to educate the public and solicit input from stakeholders.

Todd Schulte, president of FWD.us, told VICE that the proposed rule represents "a substantial victory," but added that measure "isn't fundamentally easing huge burdens in our immigration system for the majority of people here." His organization is already planning for a broader immigration reform push in the coming year.

The rule change could also benefit entrepreneurs whose business partners don't have access to a work visa—like Federico Parietti, who recently completed a PhD in mechanical engineering at the Massachusetts Institute of Technology. This March, Parietti co-founded Multiply Labs, a company that uses 3D printing to produce personalized supplements in pill form.

Parietti, an Italian citizen, will have three years to live and work in the US under the "optional practical training" available to students holding a student visa, so he isn't in the market for immigration help at the moment. One of his co-founders, however, can only stay in the US for six months with her current work visa and might be able to stay using the proposed rule, he said.

"I love the startup rule," he told VICE via email. "I think that it would have a fantastic impact on the startup ecosystem in America."

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