> This is a bill that proposes to give US venture capitalists the overt ability to terminate the residency status of founders and their families.
False.
"To make visas available, we would amend immigration law to create a new EB-6 category for immigrant entrepreneurs. We would draw from existing visas under the EB-5 category. The EB-5 permits foreign nationals who invest at $1 million in the U.S., and thereby creates 10 jobs, to obtain a green card. In areas where unemployment is high, foreign nationals only need to invest $500,000 to obtain residency. Though roughly 10,000 visas are annually allocated for the EB-5 category, less than half were used in FY 2009, so the addition of immigrant entrepreneurs should not present an unreasonable burden."
Green card is permanent residency - once they've got it, they've got it. This looks pretty awesome.
‘‘(3) SPONSORED ENTREPRENEURS.—The Sec-
retary of Homeland Security shall terminate the per- manent resident status of a sponsored entrepreneur and the alien spouse and children of such entre- preneur if the Secretary determines, not later than 3 years after the date on which such permanent resi- dent status was conferred, that—
‘‘(A) the qualified venture capitalist or qualified super angel investor who sponsored the entrepreneur failed to meet the investment requirements under section 203(b)(6)(A)(i); or
‘‘(B) the entrepreneur failed to meet the job creation, capital investment, or revenue gen- eration requirements under section 203(b)(6)(A)(ii).’’;
The job creation, capital investment, and revenue generation requirements (by the way, this language is ambiguous, with the "or" being more restrictive here and less restrictive earlier in the bill) are:
‘‘(I) create not fewer than 5 new full-time jobs in the United States employing people other than the im- migrant’s spouse, sons, or daughters;
‘‘(II) raise not less than $1,000,000 in capital investment in furtherance of a commercial entity based in the United States; or
‘‘(III) generate not less than $1,000,000 in revenue.
You know more about immigration law than I do. All I can do is read. Tell me what I'm misinterpreting.
The VC funders have less significantly less control than a employer of a H-1B visa.
Basically they are saying you have a 2 years (max 3 years) to meet the requirements (investment and jobs)of the visa, or go home. A EB-5 visa has a 2 year "conditional status" along similar lines.
A H-1B visa, the employer can terminate your job, and you have 30 days to leave the country. A VC can't do that unless the founders have given up their controlling interest.
You're saying the same thing. To put it plainly, what I think tptacek is saying, is that after 3 years, investors have a strong upper hand in negotiating a round, knowing that "Homeland Security" has set an artificial bar for how much a company must raise if the founders are to stay in the country.
Relaxing doesn't have to mean give everyone a green card. It could mean, I think that's what Tom means, that don't tie it to a set of investors rather tie it to the performance of an individual. Create 10 jobs, make 1MM revenue, get them verified by IRS, you're in the clear.
If we look at H1-B situation, what makes employers abuse it and almost makes H1-B holders useless (for anything other than their current employment) is the tie visa has with the employer. If we make H1-B holders move around freely between jobs then there is less room for abuse. IMHO.
perhaps a laudable goal, however:
1) not mutually exclusive to proposed Startup Visa Act
2) politically MUCH more challenging to pull off
feel free to contribute to other efforts to promote your ideas. however, hope you don't feel the need to tear down our (complementary) ones that may be achieved practically & expediently.
I think we're getting too personal. Both of you make a good point:
Thomas says that there certainly will be companies who will be forced to raise a arbitrary amounts of money at an arbitrary time (in both cases, I mean "arbitrary" in relation to their business), even when they're otherwise doing well. On top of that, the VCs negotiating that round will know that their investment is what determines the fate of the company.
Dave points out that this is the best solution which is politically viable.
Both seem true, in my opinion. Still, and with all due respect, Dave's bio does say he "invests in startups if they let him" (emphasis mine). This law will create a class of startups that are forced to look for investment at a stage that may have make business sense, with the only strategy at a "fair" valuation being to play off investors against each other. This is certainly in the interests of people who invest in startups.
I wonder if bundling the interests of "those who can afford to lobby" into laws is the only way to get laws passed in the US nowadays.
Hey mate, did you edit that into your comment or did I just miss it the first time? Because I upvoted you since I agree with the not mutual exclusive/harder to pull off thing, but no need to be crass like that. It doesn't help further the position we generally agree on, and clouds the discussion. tpt is a smart and good commentor anyways, even though we disagree some times - it's totally unnecessary to be crass with him like that.
The part that I'm refuting is that they HAVE to raise $1m from VCs.
From the legislation you quoted;
"‘‘(II) raise not less than $1,000,000 in capital investment in furtherance of a commercial entity based in the United States; or
‘‘(III) generate not less than $1,000,000 in revenue."
Quick glance and please correct me if I got this wrong:
This only affects immigrants with permanent residency status who have been sponsored through this bill/law. You stated:
"This is a bill that proposes to give US venture capitalists the overt ability to terminate the residency status of founders and their families."
True in the sense that if the sponsored entrepreneur was unable to fulfill the job creation, capital investment, and revenue generation terms, then they technically were unable to create a successful enterprise. Any foreign 'entrepreneur' worth his salt should and must know of this requirement and in the awareness of it, must have prepared himself and his family for the consequences.
As for part (A) "...the qualified venture capitalist or qualified super angel investor who sponsored the entrepreneur failed to meet the investment requirements..."
I think this refers to the initial requirements that needed to have been met before the foreign entrepreneur is approved for residency. It could be that the VC committed to the investment (That IS a bitambiguous, but from experience, immigration officials will approve an application and give you a chance to fulfill a financial commitment some time after the sponsored entrepreneur has arrived, provided they are satisfied with whatever guarantee docs you've filed with them.) but was unable to fulfill it, so Homeland Security will start the process of terminating the permanent residency status of the sponsored entrepreneur.
Can this be twisted around by an 'evil' VC? I believe any system CAN be abused around given enough motivation. In this case, if I were an evil VC who convinced Mr. Chatroulette founder from Russia to come to America to blow his idea up 1000x through me, I'd bring him in, dupe him into signing his life away in a 'partnership', promise Homeland Security that I will fulfill my financial commitments, squeeze everything I can from this naive new sponsored entrepreneur in the 6mos-1yr that Homeland Security will take to enforce my commitment, then not pay up. Back to Russia goes 'sponsored entrepreneur' and his concept/resources stay here in the US.
Bottom line for all parties, due diligence. I believe the bill is being put forward in good faith. I believe that they believe it can create jobs. I believe that it is possible it can.
But all things considered, I'd rather concentrate resources on finding the cream of the crop in the US and helping THEM.
I believe this bill was conceived with the best of intentions. I believe everybody advocating it, including venture capitalists, are advocating with the best of intentions.
But their intentions don't matter at all. What matters is the law that the bill will create. And, as I read it, the law that this bill creates will have unintended negative consequences both for immigration and entrepreneurship.
the 3 points are an OR, not an AND. you misinterpreted it.
altho the legislation as proposed is not final, it was clearly drafted and stated with each of the 3 potential rqmts being sufficient on their own, not together.
i think you lose your side of the argument by arguing for any arbitrary amount. i'm happy to argue the merits of what the correct # is, but regardless i think we're just splitting hairs at that point... i've won the discussion.
besides, it's a rather ridiculous amount of hassle in both time & money to raise capital from experienced investors in exchange for hatching some supposedly nefarious scheme to -- wait for it -- hire some low-wage workers.
really, while i fully admit there may be gaming of the system attempted, this supposed workaround is quite a stretch -- it requires the participation of sophisticated investors willing to risk substantial amounts of capital, reputation, effort, and criminal penalty in order to execute.
this doesn't appear to be a rational point worth arguing, you're just being contrarian for the hell of it.
it is likely the case that rqmt #1 -- that is, the creation of at least 5 full-time jobs in the US -- will easily be met by most entrepreneurs if they have any shred of competence and/or economic viability.
the rest of your argument is perhaps interesting from a theoretical standpoint, but not likely very relevant from a practical perspective.
it's very simple: create 5 full-time jobs in the US in 2 years time, and you get to stay. if you can't do that, at least get to break-even on $1M in revenue. if you can't do THAT, then find an investor willing to back you for another $1M every 2 years.
the rqmts are quite lenient and reasonable. the fate of the entrepreneur is very much in their own hands (& heads).
There are no restrictions on the kinds of jobs created? In other words, it's acceptable to create 5 minimum wage jobs?
I'm not saying that's a problem, but it certainly makes the requirement easier to satisfy. A full time minimum wage job including taxes is just about $20k a year.
Yes, it's acceptable to create 5 minimum wage jobs. In other words, if you are sponsored by an appropriate financier, you can obtain permanent residency for approximately $100,000 per year over 3 years.
again you're missing the point of the investor participation in this equation -- it's unlikely that accredited investors and venture capitalists would risk time, capital, reputation, and criminal penalty to perpetrate such a pointless exercise.
while it's possible, it's not very likely.
we did not draft legislation to cover all possible edge cases, but rather to reasonably address common scenarios.
That's great. We should let anyone who can create 5 jobs into the country, regardless of whether a clique of financiers will "sponsor" them. We should let them in regardless of whether they wear pants.
obviously we've let you into HN comments, & you're doing the equivalent of not wearing any intellectual pants... ;)
--
why are you quoting "sponsor"? why use "clique"? you're just trying to use specific questionable punctuation to indict a broad group of people w/o any real analysis of why their motives or ethics are in question.
job creation is likely to be a good thing. if you have specific solutions / suggestions on better ways to measure job creation effectiveness, please state them.
again, happy to argue about these topics rather than you simply ripping on the general proposal. at least we can get to constructive criticism, rather than whether you or anyone else aren't wearing pants.
I think you misinterpreted my "pants" comment. My point is, if you can create 5 jobs in the US, you shouldn't need anything, except perhaps a clean criminal record, to get a visa. You certainly shouldn't need the "sponsorship" of a "super angel investor".
Please stop taking this so personally. I'm not. How could I? I have no idea who you are.
actually, i was trying to make a joke there... wasn't taking it personally at all. (srsly, i just have a terrible bedside manner).
that said, when you cast disparaging comments on the entire class of VCs not treating entrepreneurs well, it's hard not to take it a little personal (altho i've been on both sides).
when you're stereotyping, it does hit home a little harder.
False.
"To make visas available, we would amend immigration law to create a new EB-6 category for immigrant entrepreneurs. We would draw from existing visas under the EB-5 category. The EB-5 permits foreign nationals who invest at $1 million in the U.S., and thereby creates 10 jobs, to obtain a green card. In areas where unemployment is high, foreign nationals only need to invest $500,000 to obtain residency. Though roughly 10,000 visas are annually allocated for the EB-5 category, less than half were used in FY 2009, so the addition of immigrant entrepreneurs should not present an unreasonable burden."
Green card is permanent residency - once they've got it, they've got it. This looks pretty awesome.
http://startupvisa.files.wordpress.com/2010/02/dc-startup-vi...
It was a pdf and I coudln't figure out how to highlight so I retyped it myself - apologies if there's a minor grammar/spelling error.