At the time, I thought PG's idea was so flawed that I nearly registered just to point out why. Fortunately, bokonist did a great job of explaining what was wrong with the idea in that thread.
Thanks for pointing to that thread. Bokonist makes a strong case against accreditation bodies in general, barriers to entry and the associated slippery slope.
While I am sympathetic to that idea, we have to remember that the Founder Visa is a type of liberalisation, not a type of barrier. The solution mightn't be perfect, but it could be better then no founder immigration. While accreditation is possibly bad in general, it may be worth it if it pokes a hole in the immigration barrier.
However, I think that there is a strong case against startup visas specifically. I think you would have to be willing to live with quite serious market distortions if you are prepared to support something like this.
So if a VC firm overseas funds a startup, who gets the visa? Do you think the VC's overseas will be generous enough to let the founder get a US visa while they remain at their home country?
There are a bunch of issues with the proposal, but hey:
#Let's say someone comes over, starts a company with $500K and it fails. Then what? Legally, they would have to leave at that point, right? If not, why not? Brad says no, they just have to found another company. That makes me squeamish; while they may be working for themselves, it's not that different than bonding to a trade.
#How many founders can you bring over for one company? What's going to stop them from setting up a consulting shop instead of a product company? We've seen that consulting jobs are very clearly 1-to-1 displacement of American citizens.
#There are a lot of issues with the verification of "bona fide founder" status. I get that VCs are OK with being gatekeepers (yeah, I plead guilty for my one year on the dark side), but it's really distasteful to hand over any part of immigration to non-government officials. More here: http://news.ycombinator.com/item?id=556908
#The pro arguments now are based on anecdotes, not data. There is no data on how many jobs we're "losing out on" by not having a more founder-friendly immigration system.
#Lastly, there's a solution that works right now: find an American co-founder. It's not pretty, as you have a distributed company in the early days, but it works.
I acknowledge the intelligence of the tactical decision to give up on H1-Bs and go after changes to the EB-5, but America would be a better place if we actually reformed the H1-B process. I do wish Brad, Eric, Dave, etc. would tackle the H1-B elephant in the room publicly. We shouldn't be trying to steal startups from other countries; we should be trying to cultivate an environment where everyone here legally - citizens and immigrants on their path to citizenship - can start one and have it thrive.
Also, and everyone's heard me on this before - this group would do a lot more for startups if they channeled this energy into healthcare reform. Job lock-in is real and affects many, many more potential startup founders than immigration policy. VCs/investors from outside SF/NY (cough Brad Feld cough Josh Kopelman cough) would especially be credible, useful voices on a matter that's actually front and center right now.
How many founders can you bring over for one company?
That's hardly an issue. The optimal number of founders is basically known. You can argue about 2, 3, or 4, but it's obviously way less than 10.
The pro arguments now are based on anecdotes, not data
The proposal is based on reasoning, not anecdotes, and it seems like pretty clear reasoning to me. The anti arguments are a lot of spaghetti thrown at a wall. The current thread is a good example.
There are a lot of issues with the verification of "bona fide founder" status.
That's not an argument against the proposal, it's an argument in favor of sensible policy design - something that is lacking in the status quo.
there's a solution that works right now: find an American co-founder.
A profoundly ignorant statement. Arbitrary co-founder relationships are a predictor of failure. "Marry an American" would be better advice, and it's horrible advice. (Edit: I mean horrible advice for startup immigration! I'm all in favor of marrying Americans generally :))
We shouldn't be trying to steal startups from other countries
Yes "we" should. That's one of the most intelligent things a country that wants to build wealth could do.
this group would do a lot more for startups if they channeled this energy into healthcare reform
Visa issues are a huge obstacle facing startups (edit: and startup investors); there are many, many examples. How many times does "health care" appear on such a list? I've never heard it cited once.
If I were an immigrant from China or India under this new visa program, the first thing I would do in hiring programmers is fly back home and crank up a top quality, low cost team. As things progressed, I would take it further: anything not absolutely necessary to be within 50 miles of my investor would be done back in my home country.
As an investor, I would fully expect/encourage these founders to behave like this.
The typical cultural and communication problems of outsourcing do not apply in this case. You are taking someone from their home country that will have experience working with their own people and processes.
> "Visa issues are a huge obstacle facing startups (edit: and startup investors); there are many, many examples."
Can you please provide these examples?
> "How many times does "health care" appear on such a list? I've never heard it cited once."
Quite a bit actually. Given how much Health Care reform is in the news, I find it surprising the proponents of the founders visa didn't think about this issue already.
I know at least a dozen people who have personally experienced this, but I'm not going to name anybody. I also have read and heard many statements by people like PG, Fred Wilson, Brad Feld - people who really know about startups - who mention this as a key issue. I have not ever heard anyone bring up health insurance as this specific kind of impediment before, until a few moments ago when people suddenly started mentioning it on HN as a way to monkey-wrench a completely different issue. Find me someone who's made 20 or more angel investments who agrees that the visa issue is less significant to new startups than health care, and I will grant the legitimacy of the objection.
(This is not to say that health insurance isn't a big issue in general, though personally it strikes me as more of an issue for people who want to switch jobs than found startups - that's important, but not the same thing.)
Edit: in fairness, I should add that many of those people I know personally did eventually get visas, but it was expensive, difficult, and distracting - to such a degree that everyone who goes through the process says it is insane.
I have heard from a few investors that immigration issues caused problems. When I query about what percent of founders this applies to, I hear numbers like 10% or 20%. What numbers are you hearing?
Unfortunately your challenge is flawed of finding investors that have experienced health care as more of a problems than immigration. The health care argument is that people won't consider quitting their day job because of this problem so they never reach the point of showing up on an investor's radar. I know far more well qualified U.S. citizens that would love to start their own business than there is money to fund them. Health care is generally the number one reason cited for them not leaving BigCo.
The founder's visa argument is there are not enough founders to invest in in the U.S. Some people, myself included, are simply trying to point out that not only may there be far more than immigration reform could provide, but that legislation is currently in progress that might alleviate a big part of the reason they are not "on the market".
I am commonly "self-employed", at least from the perspective of Health Care insurers. I have insurance, but mostly to appease my wife. Do you know the stats on cancellation for an "individual" policy if you actually do get a serious illness? Its well over 50%. I know my insurance is most probably useless, as I said, I pay for it to appease my better half who is more risk averse. Most founder-wanna-bes do not have enough money socked away to spend as I do.
I agree that immigration process is insane and unfair to the immigrant. One big problem I have with this proposal is it is highly self-serving to investor desires and doesn't put leverage on the more important issue of simply treating all legal skilled immigrants more appropriately.
The percentage of founders that immigration issues cause problems for is a flawed metric. A very large number of potential founders do not go beyond seriously considering starting a startup once they look into how complicated the immigration issues are. So you need to look at potential founders.
I know, I am personally going through this right now and went to grad school with or worked with 10 different people who had the technical chops and a strong desire to start a startup but decided against it when they saw the risks it entailed from an immigration stand point.
This is one of the few comments in the thread that makes sense to me.
I haven't asked anyone about percentages, but one thing we can say is that whatever the percentage is of foreign-founded startups trying to relocate to the US, that would be roughly the number who are having trouble doing so.
As I pointed out in another comment, the best investors say that their bottleneck is finding good startups to invest in. Objections that reduce to the idea that these people don't know their own business (or are lying) don't hold much water with me. It also seems obviously true that a demographically small number of new startups (a few thousand) would provide huge economic leverage. (Sure, their investors would get richer, but the whole country would get richer. This isn't a financial shell game, it's about creating value by making things.) So the question reduces to the design problem of figuring out a good way to identify authentic startups and minimize gaming of the system. That isn't prima facie insoluble, so all these arguments that it can't be done, at the very beginning of the discussion, just seem disingenuous to me.
What you say about health care from your own experience is very clear, and I certainly hope that that situation gets replaced by a more rational and sustainable one.
Edit: by the way, there's a problem with this:
Unfortunately your challenge is flawed of finding investors that have experienced health care as more of a problems than immigration
That's not my challenge. My challenge was "Find me someone who's made 20 or more angel investments who agrees that the visa issue is less significant to new startups than health care" (emphasis added), in other words, a leading investor who has gone through the same thought process as you guys and arrived at your conclusion that the HC impediment is more important than the visa one. If the argument is a good one, it ought to be possible to find someone who knows early-stage startup investment inside-out and agrees with it. This is a significant point because one thing we know about the business of startup investment is that it doesn't work the way most people think it does. By the way, I'm quite willing to change my mind about this, but not as long as I see all the most credible people lined up on one side of the issue.
This has been a healthy debate. I only harp on the HC issue because I think its symptomatic of the community not thinking outside the box enough. I don't think its the only issue or possibly the largest one. Usually, the weekend posts on HN are a bit anemic, but not so this weekend. Here are two other articles and threads discussing troubles in startup-land: http://news.ycombinator.com/item?id=833234 and http://news.ycombinator.com/item?id=832672
Taken as a whole, there is much room to discuss how to create a more effective environ for innovation, job, and wealth creation.
I grant you that it's a data point (well, sort of), but what I meant is that I've never heard it being cited by people who know a lot about startups, and they cite visa issues all the time.
Anyway, bringing up health care in this context is the very definition of a red herring. Nothing stops one from being in favor of both sensible health care and sensible immigration.
Your right, it would be great to fix both health care and immigration. But this founders visa plan doesn't do either. It attempts to create a new category of immigration to fix one issue that certain investors have. If you really want to fix immigration, at least start by dissecting the problems with H1-Bs. I do see that the current proposal claims that an easiest route would be to modify the EB-5. But this is really creating a new type of visa for this special purpose.
It attempts [...] to fix one issue that certain investors have.
That seems disingenuous. This isn't about a few rich people's personal convenience. It's about lowering an absurd impediment to the creation of innovation and wealth.
The investors you mention must be really dumb to waste their time on foreign founders, let alone immigration reform, if they could just go and find better startups some other way. They say their bottleneck is the supply of good startups to invest in. Are they lying or incompetent?
If this ever gets in front a Senate committee, hopefully they will have to disclose hard numbers so we can find out. I don't see why they don't go ahead and publish their data right now if they want encourage more support.
Also, and everyone's heard me on this before - this group would do a lot more for startups if they channeled this energy into healthcare reform. Job lock-in is real and affects many, many more potential startup founders than immigration policy.
Absolutely. The "founders visa" thing isn't bad because it's scary policy; it can't be scary since it will never happen. It's bad because it's diverting our attention from the real issues.
Exactly! And the real issues are that our society isn't concerned with producing bright scientists, engineers, and researchers. They are concerned with producing more pop stars, tv stars, athletes, etc...
The inventors, innovators, and scientists have made life so easy, we've forgotten how necessary they are to provide us with the life we live. I'd say the intellectual contributors to life improve it immeasurably more than a basketball star, but the admiration is completely flipped.
When China and India become the super powers through a direct concentration on study, science and technology and we are left in the dust the equation will flip again. It was the space race and the cold war that made scientists sexy and we'll get back there when we realize we are not so powerful anymore.
The founder visa concept is just a band-aid. It's a farce. It's a ruse created by investors to give themselves more power and opportunities to fund companies, but I don't really see a lot of positive benefit to society coming out of the companies I'm seeing funded lately.
Most of the startups that have been promoted since the web 2.0 fiasco are pretty stupid ideas really and if they do succeed we will continue to be worse off as a nation. Ad networks? Upload a photo today? Show my location 24/7? 140 character messages? Really people? Is that the direction we want to take our country? We need more visas for that nonsense?
> It's a ruse created by investors to give themselves more power and opportunities to fund companies,
I doubt that investors are looking for more power or opportunities to fund companies, there is rather a glut of ideas and companies that could be funded than a scarcity, so that can't really be the deciding factor here.
What I think drives this whole idea is that to regain the lead in innovation you have to make it possible for innovators to get in on the game. And America is the country to be in for that.
I only have to look at my own history to see how much difference location can make when you are just out of the 'seed' stage.
Whether it would work or not is a different thing, but I definitely don't see it as a ruse. Merely a nice idea but probably ultimately too hard to execute properly so that it is only an all across the board 'win', instead of a 'win' for some and a 'loss' for others.
I don't think that the Founder's Visa is ruse. I think it's a not particularly well-thought-out idea that resonates with the start-up community because it seems to address some problems and, even-more, seems to validate the identity 'Founder' as something worthwhile.
I do think that start-ups provide something of worth to society. However, I think it's a problem when public policy starts to be about massaging some groups identity.
Well said, if something like this actually got passed, which I doubt, it wouldn't be one of the many things that I "fire" my representative for come election time.
"Job lock-in is real and affects many, many more potential startup founders than immigration policy. VCs/investors from outside SF/NY (cough Brad Feld cough Josh Kopelman cough) would especially be credible, useful voices on a matter that's actually front and center right now."
Frankly, a lot of us aren't even funded by VCs anymore. Boot strapping and staying frugal has helped. I don't really have it in me to go grovelling to VCs anymore. DONE.
So whats in it for the individual startup chaps? Or will VCs continue to dominate everything?
Personally I would like to get an US visa, startup or not -- but this is plain ridiculous. As I understand it, the VCs are running out of good projects to invest in in the States, so they want the hill to come to Mohammad, i.e. the founders to get to the US.
US is a lovely country I'd very much like to visit, but why don't the VCs simply pack up themselves and go to other countries and fund startups there? I understand that they would find it difficult to follow their investments in foreign environments, but there is a number of solutions they could combine, from having trusted local experts at location, to combining western legal entities with the local technical expertise (Seedcamp's Zemanta, from Slovenia, is a good example).
I see over and over naysayers of this visa claiming all kinds of fraud that can happen, and all kind of reasons why it is a bad idea, without really addressing on how to make it fair.
To the all naysayers of the visa, there are easier system's to game the system. Marriage. That's right. I have a friend that did it (with way less than 20k). Sure there are some steps to prevent fraud (even interviews), but that doesn't stop most people getting married just for citizenship, except the most obvious cases.
According to the 'nay-sayers' logic, we should stop giving green card/citizenship through marriage, b/c maybe 15% of them are fraud.
If you really really want to live in the US, and have about 50k, you will find somebody that will marry (my friend found it for a lot less money). No need to go through this Visa problem.
It is kinda wierd, but it is much easier for a less educated person to game the system, then for somebody that is more educated (most under the table jobs,are blue collar ones).
In any way, saying we shouldn't let the Founder Visa b/c there might be potential fraud, is pure FUD. Fear, uncertainty, and doubt, just for your own little short sighted self.
If you enjoy an america without immigrants, a go live in West Virginia, or Alabama.
Be ready for influx of "startup founders", that would bring to the country taxi cab drivers, gardeners, all kind of "engineers" from India, China, Mexico, North Africa and so on..
Did you forget that very recent scandal with Satyam... They did what I just described...
not sure i understand your concern? the proposal we're working on is a modification to the EB-5 Visa, which currently requires a $1M investment (or a $500K investment in economically targeted area).
even with a lower capital rqmt of say $100K-$250K, i don't think many people would be willing to put up that kind of cash for a taxi driver.
on the other hand, it might be useful to make sure the source(s) of capital are from accredited and/or institutional investors, in order to prevent abuse.
It saddens me to see so much effort put into this kind of proposal. I favor loosened immigration conditions but this is a poorly thought-out scheme that seeks to create private initiative via government intervention.
It doesn't just threaten to pollute the 'immigration space' with folks trying to seem like 'founders', it also pollutes the start-up space with these folks. If someone is 'creating jobs' with the goal of securing a VISA, they could put out ads (which real job seekers will try to answer), then hire only their friends, get the wages paid kicked mostly back to them and have a VISA pretty cheaply since they would get back a good proportion of their money.
Sure, you could have regulators looking for people who did stuff like this but it would get clunky and I'm sure folks could think of umpteen other schemes to get around this. I'm not a Austrian or free-market nut but I think the Austrian arguments are most plausible when governments try to micro-manage enterprises.
It would simpler to elimenate h1b's, skip the 'founders' and give N VISAs to individuals with documented skills and M to individuals who just pay a million dollars directly. That would bring skilled workers and investors here without a lot of falderal. If you wanted to make sure they were never unemployed, make them put up a bond.
And Taxi drivers can make up to $100K/year if they are committed (a lot of them work literally 24 hours/day). A beach-head in the States is worth a lot in many parts of the world since once you arrive you can bring your entire family. $100K for ten people to immigrate here is a good deal. It's not something I'm even opposed to as such - my father and ex-wife were both immigrants. In fact, the main thing I oppose is the way present system creates distortions which helps neither the economy nor the immigrants.
As pointed out by gruseom below, if somebody wants to game the system, they will come on a tourist visa and simply not leave. I don't think these convoluted scenarios of possible abuse are realistic at all. Furthermore, if the founder's visa law is any good, it will not require the founders to create jobs. It will simply assume that from 2500 startups a year, many will create a lot of jobs.
While one can overestimate the number of folks gaming the system, there certainly are some.
It is much more desirable to attain the legal right to reside in the US and/or the legal to work in the US compared to simply getting to the US and residing illegally. Thus there are those who attempt to gain these things under false pretense - sometime they succeed now. Sometimes they are even people we'd want here but even then, it would be better if they come in an orderly fashion rather than scheming up ways to work legally here.
Whoa there. I brought up the tourist visa as an obvious way to enter the country and then work illegally, to answer the bogus objection that a founders' visa would lead to more illegals stealing American jobs: all that would be is an expensive and convoluted way to do what anyone willing to break that law can already do cheaply and trivially right now. And it wouldn't even work as well, since your name would be associated with the company you'd "founded", leaving a trail that the other method wouldn't.
Edit: I suppose I should mention that no, I am not condoning anyone who enters a country on a tourist visa and works illegally.
this is a poorly thought-out scheme that seeks to create private initiative via government intervention
But that's absurd. It's trying to lower a government barrier to individuals who are the very definition of private initiative. And I don't mean that in a moral sense. I mean it in a dictionary-literal sense.
Comments from joe_the_user and sachinag do a good job of summarizing some issues previously discussed on HN.
I do believe that affordable health care attached to employers is a huge problem for enjoying a larger pool of U.S. entrepreneurs of every variety. Fixing this, which is an issue on the table with current Health Care reform, should bring far more new entrepreneurs than any new visa program would. Since the Health Care legislation is currently in process, why not write your congressman about this instead?
This current founders visa proposal sidesteps fixing what's already abusive with H1-Bs. Skilled immigrants deserve a better process than they current have. It would seem to do more good to fix this than inventing some new category and ignoring the existing problems.
Another problem is this agenda may not get a lot of love from U.S. entrepreneurs or would-be ones as there is a subtext to the founders visa agenda which says 1 - there are not enough good entrepreneurs in the U.S., which is very insulting; I've never seen any credible evidence to support this and 2 - VCs get to be "accredited" providing various leverage problems as discussed.
Last, but not least, how many of these visas do you expect to create each year and at what cost to the government? Just to issue the first visa could have a fixed cost of hundreds of millions. Have you ever worked in government or anything related to INS? The rules and documentation and training required for this program would be costly. Do the investors plan to give the gov shares in these startups to make up for these cost? You can say that the reward will be job creation. Maybe, but I have seen interesting numbers on this.
By definition these 10,000 founders wouldn't be taking jobs from Americans: it could be part of the terms of the visa that they couldn't work for existing companies, only new ones they'd founded. In fact they'd cause there to be more jobs for Americans, because the companies they started would hire more employees as they grew.
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Of course they will not be hired by other companies...Legally...But USA is not the country where illegal employment is punished.
Every time when you open access to your (rich) country to poorer people think about how the system can be abused.
Of course they will not be hired by other companies...Legally...But USA is not the country where illegal employment is punished
People who choose to work illegally do so today by arriving for free on a tourist visa. Why would anyone put up capital and start a company in order to do it?
It's sad how the founders visa isn't even close to reality yet, and already has vocal opponents bringing up bogus reasons why it's a bad thing. How long will it take until somebody complains about "foreigners taking away startup opportunities from Americans"?
Uh, while some folks may bring up racist or otherwise ridiculous objection to this idea, sachinag, bokonist and others have brought up well thought-out objections that I haven't seen answered with much thought (the claim that tourist visas are the only thing subject to abuse seems hardly creditable but I'll argue more if someone fleshes out this one existing counter-argument).
It seems like the founder's visa already has a lot of emotional traction with people but immigration isn't something should be decided by emotional resonance but by well thought-out arguments - if you take the discussion to the emotional level, things won't go well for those favoring immigration.
The thoughtful objections have not been against the idea as such, but mostly against the proposal that a board of investors or government officials would decide who is good enough. That would indeed a problem - startups that VCs or government approve would likely be the ones immitating the previous big thing, rather than building the next big thing. But I think a board is not necessary. In my opinion, all that's needed is that the founders
1. have bachelor's degrees,
2. register a corporation,
3. start with at least $X in the company account.
The value of X is up to debate, but it should not matter which investors they received the money from. Details can be worked out.
Many well-informed criticism of state actions aren't against the goals of the intervention as such but merely against all the possible implementation those goals.
I do not see anything bogus in my reasons. There a lo mor important problems to be solved for making the market for software/internet startups better place. Namely - fixing pharmaceutical industry which is main reason why such an evil corporation like USPTO exists, which inflicts problems on software/internet industry by means of issuing bogus patents for buttons on webpages so on. I kno many American people who suffered a loot from patent lawsuits. Heck, even Reaearch on Motion has been bitten by bogus patent.
this is a logical fallacy. Other more important issues don't make this issue less important. This is a hackers website not a health care/doctors website.
The topic is a visa proposal which proposes to "hack our economy". Although I don't completely agree with likhd2, bringing up health care is of relevance if fixing certain of those issues would create more jobs and startups than this visa proposal.
1. More important issues do make other issues make other issues less important after the have been taken into consideration by definition of word "more" and less.
After more important issues are taken care of - well yes, the do not alter the priority of other problems.
2."Hackers" are people, and the topic of this talk is not about computers either; if you are about to start political campaign you can not tal about RoR, hadoop, clouds or whatever else technological; you gotta take into account, real old like humanity issues - healthcre, fraud, flee of capital; externalities of robbing countries of enterpreneurs.
I knew that not especially bright people would read my post and think that is about doctors. No, my post is about patents: USPTO is US Patent authority, that gives patents for all industries; it is carried/lobbyed by pharma, that itself have millions of questionable patents, and very interested to leave thing as they are; attempt to dismantle software patents would disturb the swamp, and as side effect should be prevented.
Because:
1. If you work on tourist visa, your defintely need to exceed the allowed period of staying, let's say a month, and you are destined to become illegal _resident_; but when you come as startup founder, you will be _legal_ resident, inot matter if you __work __ illegaly.
2. Now you came as a startup, what you can do - instead of making a new unique product you just go and work with a software giant, doing let's say testing. Who is gonna watch what you are actually doing?
At the time, I thought PG's idea was so flawed that I nearly registered just to point out why. Fortunately, bokonist did a great job of explaining what was wrong with the idea in that thread.