It has become Increasingly Clear that the U.S. obviously doesn't have enough home-grown talent to compete in the electronics industry. For several years, the U.S. has been importing design-oriented talent from foreign countries under the H-1B visa program, a temporary visa for immigrants working in high-tech or other specialized fields. The H-1B visa, in particular, has been in extremely high demand in past years, but the program has also been somewhat controversial because of competition with U.S. workers.
Now, Senators Kerry (D-MA) and Lugar (R-IN) recently introduced the Startup Visa Act that modifies the existing EB-5 Visa to create an alternative to existing visa programs like the H-1B. The Startup Visa Act requires modification of the existing EB-5 Visa in order “to drive job creation in the U.S. and increase global competitiveness.” Created by Congress in 1990, the EB-5 Visa is available to immigrants seeking to enter the United States in order to invest in a new commercial enterprise that will benefit the U.S. economy and create at least 10 full-time jobs. There are two ways to invest within the EB-5 category: creating a new commercial enterprise, or investing in a troubled business.
The intent of the new Startup bill is to enable immigrant entrepreneurs to easily acquire visas in order to start new companies that will create jobs. A special founder visa would prioritize bringing entrepreneurs into the country, keeping the United States competitive as a hub of global startup activity. A startup visa should also avoid some of the controversy of other visa programs, since a startup founder is ostensibly creating jobs, not competing for them.
For each start-up company there can be up to three founders that get two-year visas along with their spouse and children. An entrepreneur that applies for a Startup Visa can be sponsored by either a qualified venture capitalist or a qualified super angel that is investing at least $100,000 in an equity financing or not less than $250,000. Each qualified investor needs to be active, accredited and have met minimum requirements. The venture capital (VC) firm must be made up of predominantly U.S. citizens while the Angel must be a U.S. citizen.
After two years the visa must be renewed. To qualify for renewal the startup company must:
- Create five new jobs every two years, or
- Raise at least $1 million every two years, or
- Generate $1 million in revenue and be net income positive.
It is hard to believe that the Lugar-Kerry bill will have a major impact on job creation. After all, most startups rarely begin with more than a handful of employees.
Venture capitalists have the most to gain by the Startup bill. As evidence to this potential gain, about 20 Silicon Valley venture capitalists recently descended on Washington to support the newly-introduced Startup Visa Act of 2010. It is not surprising that venture capitalists want the bill passed. The question remains: why aren't there enough good American entrepreneurial ideas worthy of investment?
Another question can be asked relative to the visa programs. Why doesn't the U.S. improve its entire educational system rather than trying to work around it? It ís time to start from the ground up at the elementary grades and work through other facets of public education into the undergraduate schools and improve their curricula. Plus, the U.S. educational system must put more emphasis on science and technology, which would go a long way toward filling in the U.S. educational gap.
Finally, I'm not sure how you would train technological entrepreneurs, whether in the U.S. or elsewhere. A successful entrepreneur should have an innovative technical background and a business perspective, which is a difficult combination of talents to acquire.