Unfortunately, the proposals in this blog entry make me very nervous. I'm all for making it easier to allow talented people entry into the US, but I hate the idea of empowering investors to grant green cards. I think Paul Graham is an inspired investor and a smart guy, but should he be allowed to decide who comes into the country and who doesn't? Should a panel of credible lawyers, VC's, and entrepreneurs be allowed to do this?
I think that an employer should be able to offer a job, not US residency. I think an investor should be able to offer money (and advice, guidance, support). But not a green card, no way.
Think of the implications here. A young investor really doesn't need the money. He's ramen profitable. But he needs the investor's permission to be a startup in the us! Well, that's one way for VC's to get the upper hand in an era when their money doesn't matter as much.
Look, I know hacker news folks tend toward the libertarian side and are generally skeptical of government. But I want the people who decide to award green cards to report to the voting public, not to Larry Ellison. I admire PG, but he doesn't answer to me as a member of the voting public, and he shouldn't. Once VCs gain control over the immigration system, they assume a government role, but we can't exactly vote them out of office if we don't like their decisions. And even if you have faith that PG will be a good guy, do you feel that way about "credible VCs and lawyers?"
Winston Churchill said "It has been said that democracy is the worst form of government except all the others that have been tried." Personally, I'm not all that interested in trying out a regime of VCs, no matter how credible a panel has found them to be.
As for the "Green cards to all CS majors" idea, I think a very narrow rule targeting CS would discourage US students from this field, and encourage them instead to pursue more protected degree paths like law. I'm worried about any policy that would drive the already low interest in CS among US students even lower. I also think a University should be in the business of granting degrees, not US residency.
Yep, this part really struck a nerve: (2) the founder has to own at least 10% of a company that has raised $250,000 within the same year as the application for the Visa.
This is a power trip from the VC's it's also a method by which they can extract more equity from the founder of the company using "coming to america" as a carrot.
What does raising money have to do with founding a company? This is a stupid and ego-centric view of entrepreneurship.
90% of VC funded startups fail. 80% of restaurants fail and according to the SBA, as a general rule of thumb, new employer businesses have a 50/50 chance of surviving for five years or morehttp://www.businessknowhow.com/startup/business-failure.htm
Seems like it would be better for america if raising money was not a requirement of being a founder.
This is indeed a terrible idea. Every day it seems like I read folks on hn who are indeed familiar with start-ups and investment but who think they thereby understand economics.
The first thing they often don't understand is how perverse incentives work. Consider, lots of folks with $250K in the bank would be happy to get a guaranteed $50K out of it. So they would "invest" (launder) the money into a fake start-up which would serve only for the "found" to give them back their $250K plus $50K in return for the "founder" getting a green card.
Just one bad effect of this would be the fake start-ups themselves, which would pollute the start-up space with starting with more fake craiglist ads on up.
A book I had about US immigration said that the situation you outline actually occurred with the E-2 visa for quite some time. That's why the criteria for the E-2 are so strict now - if the criteria weren't so strict, it'd be the ideal "founders visa" already. Basically the post is proposing creating a lax E-2 (of sorts), which already failed once. (Even though people are throwing around numbers of $500k, etc, for the E-2 - that was certainly not the case even a few years ago.)
Perhaps the most interesting comment over there is on relaxing the criteria for the O-1 visa instead. Perhaps instead of being "incredibly famous" you could just be "well known in your field" instead.. I better keep in the top 100 on Hacker News then ;-)
My mother managed to get an O-1 actually - and she's not even college-educated. She's simply quite well known and regarded in her community (knitting, arts and crafts), and that was that.
The 500k number comes from people confusing the E-2 and the EB-5 I suspect. The EB-5 program gives you a greencard for a 500k$ investment in an disadvantaged area or $1m anywhere else. The money needs to be "at risk".
If there were programs I felt were sufficiently reputable I'd go for it. However, I'd want to quantify the risk. I'd rather not get into a situation where some ski resort gets partially built, goes under and funnily enough its all the immigrants money which disappears into dubious hands.. and the immigrants should just be happy they got their greencard.
The post makes no mention of investors being able to offer a green-card. Rather, only temporary status in the US for 1 year. Sure, most of the companies will fail and the founder's status would expire, but if you can get 1 Google founded in the US for every 1000 failed startups, I think the net effect would be positive for the US. In fact, I mentioned Google intentionally, because it's just one of a handful of companies started here because, at some point, the founder was grated status here. The same goes for eBay (France), Intel (Hungary), Nvidia and Yahoo (Taiwan). How awesome would it have been if a Samsung or Sony were started here? I don't know about you, but I'd much like to continue to see such companies in the US, making the American economy and the ecosystem of entrepreneurship unparalleled in the world.
In fact, Paul Graham's original essay leaves handing out the "founder's visa" entirely in the hands of the government. No mention is made to giving investors the power to grant immigration status. It would work in exactly the same way that the H1B visas work: Companies can vouch for a candidate to the government in an application, but ultimately it would be up to the government to decide. Don't like who they pick? Don't vote for your senator next time.
VCs and investor would "gain control over the immigration system" with the founders visa no more than universities and tech companies have control over immigrants with H or F visas
"It would work in exactly the same way that the H1B visas work: Companies can vouch for a candidate to the government in an application, but ultimately it would be up to the government to decide."
I completely disagree with this characterization of the H1B visa. Clearly, the visa is controlled by the employer, not the employee. And while the government does have to "ok" the visa, the employee does not apply directly to the government. The employer has tremendous, overwhelming authority over who does and does not get to come into the country and get in the queue for a green card.
A "points system" like the one used in Australia (discussed in other posts here) would preserve the immigrant's freedom, but I would like to point out that an Oracle lobbyist argued fiercely against it when a congressman proposed this, saying it would be "communistic" to have the government, rather than corporate HR, decide who Oracle gets to hire.
Personally, I'm outright cynical at this point. At first, I thought this was a design flaw, but now I'm pretty convinced that the industry likes the indentured nature of the visa and the extraordinary power it gives them over their employees. Those pesky US citizens and permanent residents can demand raises, leave for other offers, even gasp! start companies that compete with Oracle! Well, we can't have that! But H1Bs need green cards, and transfering jobs is risky, so by and large, they'll accept their lot in life and stick around for 5 years under the conditions we dictate.
"VCs and investor would "gain control over the immigration system" with the founders visa no more than universities and tech companies have control over immigrants with H or F visas".
We have profoundly different perspectives on the degree of control tech companies have over their employees on H1B visas.
I especially like the implications of item (b). To achieve this, we would have to have a public db of _all_ salaries!!! It would help normalize things in the same way we normalize real estate sales. Note: I do not believe public real estate sales data has anything to do with the real estate bubble and its collapse. Its possibly the best part of the U.S. real estate market.
But good luck getting congress to force all private and public companies to publish their salary data ;).
You could get a close enough estimate to implement the program from tax data, or confidential surveys of a small sample of employers, without requiring full public disclosure of all compensation.
But good luck getting congress to force all private and public companies to publish their salary data ;).
On a political level, I agree, it's a longshot. However, a company that claims it can't find qualified workers at competitive salaries and is asking for a special visa program certainly should be willing to make its salary information public.
I like these ideas.. ultimately you want people that are interested in becoming productive, value-adding members of society, whether that be genius tech founders or hard-working floor moppers. The challenge is finding the right mix of objective qualifications that represent this characteristic.
I think this is a great basis for eligibility. It isn't all that different from the "points" test in Australia (or Canada, from what I've heard).
My only difference is that I can't get behind granting residency to "everyone" with these attributes ... lots of people, sure, but I think that for practical reasons, the US can't offer citizenship or residency to everyone who would like it, even good folks who meet your criteria.
But considering that we take about 1.2 million a year into the US, I'd much rather a good system based on the criteria you've proposed than the dysfunctional nightmare we have right now.
Great proposal but somehow those companies which currently important H1b's for the wage savings they offer just never seem to behind sensible thinking like this. They must not be thinking very far ... beyond their bottom line.
If you don't like the "board of industry experts" idea, just go with Feld's second idea: "owns 10% of a company that raised $250K". That's a totally mechanical standard, which delegates no decisionmaking outside government.
Further, it should go without saying that other immigration conditions -- non-criminal, etc. -- will still be in effect.
I do think the proposal could be even more simple, though. We could just sell Visas to anyone who's law-abiding and self-sufficient. Then the only dimension for argument between pro- and anti-immigration advocates can be the price.
Start with a small pool and auction them off at a high price. Do a rolling study of taxes paid, jobs created, and services used by those who purchased those Visas. Each year, if prior experience suggests more people entering under this program would have been a net benefit, increase the pool. If the study ever indicates the entrants were a net drain, decrease the pool in following years.
You can even bias the whole process strongly against more immigration, to pander to the paranoid, and it would still address one of the biggest problems facing businesses: the uncertainty of getting a key employee in-country. There would be a relatively predictable price for doing so, which would allow rational planning.
Great, so all the rich sons of the Saudi Arabia royal family will buy their green card so they can travel freely, and all the entrepreneurs will stay home.
Rich heirs travel pretty freely already, and under this plan at least we'd get their money.
Plus, since such wealthy quasi-tourists create no net cost (and probably create value) with their visits, each year we'd increase the allotment until it reaches the intended audience: productive people we'd rather have here than competing against domestic employers from elsewhere.
I'm all for making it easier to allow talented people entry into the US, but I hate the idea of empowering investors to grant green cards.
Do you really think this will happen? This is a terrible idea, and if it were a good idea, the govt would never give up the right to decide who enters/stays the country, even partially.
Invoking the need of a panel indicates a fear of assuming a responsibility (i.e. diluting it into the faceless panel.) Why not just try it out, and afterwards evaluate? If it works, great; if it doesn't, if possible learn about why it didn't, and move on to the next strategy. All you'll lose is a year or two. And there is such thing as the right timing. In any case, nothing stops the legislator from doing both: going the panel way and the non-panel way simultaneously.
As it stands, right now, I'm likely to start a company outside the US. I'll create jobs overseas instead of here just because of the hassles I've had with US immigration. I find the situation to be rather illogical.
I'm currently on a H1B and in the greencard queue. Anti-H1B people love to rave about my taking jobs from US citizens. I get to hear it in person from time to time because, since I'm white and speak English with an indeterminate American style accent, people presume I don't object to them bitching about the Indians and Chinese H1B holders while I wait at the coffee stand.
I'd rather start my own company. I've had a startup before in Europe so I know what I'm getting into. Then someone else could take my current job. I'm financially secure (close to $1m cash in the bank in addition to my long-term investments) but:
- I want to solve my immigration status and not resort to non-immigrant temporary visas like E-2
- I'm not happy to just hand $500k to $1m over to an investment of unknown risk to get an EB-5
- There is enough to do while starting up without getting bogged down in convincing some non-expert in the merits of a business plan and a schedule of hiring etc.
- My H1B NIW just got a request for evidence despite my letters of recommendation from "household names" in my particular industry (sorry to be deliberately vague).
- I have a government in another country willing to throw money at me to startup there
Now I could startup abroad and transfer back and jump thru various hoops that way. But, frankly, I have a young family and want to build a permanent base for myself. I rather like Northern California for that but there are many other nice places in the world as well.
shrug it leaves me confused as to why the US is so hostile to my intention to build a home here and create jobs.
"Anti-H1B people love to rave about my taking jobs from US citizens."
I'm largely opposed to the H1B visa, but I definitely don't like to rave about your taking jobs from US citizens. I certainly don't think that you have.
This visa was truly a miserable piece of public policy, and I think the US should regard it as a failure and try to implement something that is in the better interest of the American public as well as the people who would like to work here and would make great contributions.
I read a bit about Australia's points system, and I think it's a good approach. You get points for having valuable skills, proficiency in english, and so forth. If you exceed a certain threshold, you get a "visa" (I'm not sure if that's the term they use, it's a residency and work permit). What's so cool about this system is that the visa is granted directly to the individual, so it preserves freedom. I also like it because it doesn't single out high tech - lots and lots of different professions and trades get full points, so engineers/programmers won't feel singled out and thrown under the bus, so to speak. While the needs of employers are a factor (a job offer adds points), it doesn't give employers control over the worker's right to reside in Australia.
I know you've had a bad time of the US immigration system, and anti-H1B ranters have given you plenty of opportunity to view critics of the program as anti-immigrant (and even potentially racist). But I'm hoping you can also agree that many US citizens who work in technical fields are legitimately outraged about abuses of this program.
I don't mind at all if you personally disagree that the H1B program has deterred Americans from entering the field at a time we badly need to ensure a steady supply from our own population, but I do think you should recognize that this is a reasonable point of view that can and should be debated.
Putting my frustrations to one side, it seems clear to me that there are problems with the program, there are abuses of the program, and there are people like me caught in the middle of it all. However, some of the worst abuses, such as by Indian consulting companies that bring people over and then don't pay them while they are "on the bench" should be solved simply by enforcing the existing rules. Anytime you hear some consultant mention "the bench" there are these types of abuse going on.
Both the Australian and Canadian processes look far more sane to me. The Canadian one also runs roughly along the lines you mention.
I don't know whether Americans have been deterred from entering the field or not. However, I do know that in my particular subfield there is a distinct shortage of qualified people of any nationality.
I want to solve my immigration status and not resort to non-immigrant temporary visas like E-2
What's wrong with E-2? 5 years is plenty of time to get your company far enough, and then apply for adjustment of status (green card).
I favor something realistic, that has a chance to pass: extend the E-2 regulations to setup some ground rules so that you know that you will be getting the visa if you are a bona fide founder.
There is no $500K requirement on E-2.
As they stand, there are essentially no regulations around E-2, so you don't know what your application should contain and how it will be judged. That can be fixed fairly easily without 5 years of debate.
Initial E-2 visas are generally for 2 years with extensions of 2 years at a time (essentially indefinitely if things go well) or 5 years on renewal at the discretion of the immigration officials. I'm told by my lawyers that there has been a strong increase of refusals to renew. Eg. at the London embassy.
It is also a non-immigrant visa. It's not a matter of a simple "adjustment of status" you have to do a greencard application under one of the usual categories which can be non-trivial and an extremely lengthy process depending on your country of origin.
You are correct on all counts. But I don't think it invalidates my argument.
there has been a strong increase of refusals to renew. Eg. at the London embassy
That's the key point for me: E-2 has no rules. Let's make some rules that make it easy for legitimate entrepreneurs to get it.
It is also a non-immigrant visa
Yes, but after two years, either your startup is going places, or it's dead. If it's doing well, you can (as the CEO) fairly easily adjust, which after one year (concurrent filing of I-485 and I-140), will put you in a position very similar to having a real greencard.
I agree it's not perfect, but it has the advantage of being doable by the current administration. We can also debate long-term, more ideal reforms, but they'll remain in the form of Internet bloggers pontificating for decades. So for once I choose practicality: get some actual change going.
I'm not arguing whether the E-2 rules should be adjusted for legimate entrepreneurs or not. I'm just saying that as it stands, I don't want to use it.
You refer to "fairly easily adjust" and do concurrent filing of the 484 and 140 - this is the same as one does after labor certification in the H1B process. However, its not at all clear to me which category of greencard you are referring to with your "fairly easily adjust". I don't think EB-1 applies and the rest take just as long as the H1B to greencard route. Can you clarify which category you are talking about?
The US is not rational, but just follows its regulations (as judged by the case adjudicators). Are you familiar with the so-called "NYSDOT case" with respect to the National Interest Waiver? Why did your lawyer put you into NIW? Does your work have biomedical applications? (It's not necessary, but that's what NIW is usually used for) Otherwise, I think there are special categories for high-earning folks like you, called "top of the field" (or something).
If Brad Feld wanted to encourage entrepreneurship, he'd be bothering his Congresscritters about healthcare reform for 47 million uninsured, not making a special path to citizenship for a handful of people.
Yes, we lose some startups because of our immigration laws, but we lose far, far more to job lock-in because of healthcare.
I'm not sure that mandating young, healthy people to spend their own money on health insurance will make them more willing or more able to start companies. Health care reform can help, or it can hurt. It really depends.
amen, brother sachinag!!! I'm all for the power of immigration. But we have a vast pool of people already here that can be enabled by fixing these types of problems.
I'm surprised this idea passes anyone's laugh test. There are all sorts of issues here with distorted incentives - if my ability to stay in the US is conditional on running a company, then I will do everything in my power to keep the company limping along, and I will be loath to take certain classes of risks. This seems in tension with the very concept of a startup.
But the more fundamental flaw here is privatizing decisions about citizenship. I can't think of anything that's more appropriately handled by government.
I like the way the UK/Canada do it. Why can't the US?
You need 75 points.
1) An advanced degree gets you 35. A PhD 50 and an MBA 75 (debatable, but good)
2) Gross salary over the last year gets you another 30 points (so if you made above $70k/yr)
3) Age gets you another 20 (below 28)
4) Work experience in the UK and English language qualifications get you another 10 points
Sure, this may not work for the people straight out of school (you do need 1 year of earnings and any decent dev with a Master's should be able to pull 75k) - but a couple of years of real world experience after school is probably a good thing, right?
Why does the US tie you to an employer? Probably because the H1-B program was a way to bring (relatively cheaper) labor into the US.
I agree that it's offensive, but it's also honest. If companies are going to pay MBAs more than they pay PhDs, then they should lose their right to claim that there's a "shortage" of PhD's!
In my opinion, MBAs are a commodity almost. PhDs may well be unique and irreplaceable (although not all). Note that Google founders were in a PhD track, not MBA.
Yer preachin' to the choir dude. But if you look at the starting salaries for MBAs, JDs, and Math PhD's (from top programs), the market signal clearly suggests that lawyers and MBAs are more valuable than PhDs.
Personally, I suspect this reflects cartel building and market coercion (lawyers), as well as the reality that finance people can earn large salaries without actually producing any wealth.
So personally, I do think that math/sci/engineering folks are often far more valuable than the MBA/JD folks, but I can't get behind any "shortage" argument until their pay reflects this.
This is fantastic. And the initiative speaks volumes of why US is the hub of startups.
I would any day opt to move to US and build a company over there given US is relatively a superior matured market segment for online businesses and more than that for the excellent startup ecosystem.
In the past have built products predominantly for US audience including a book readers community on facebook (which was my baby) that eventually got acquired by lulu publishing. But now when I am on my own startup I am devoid of deeper & closer understanding into the market/customers, the US presence to promote my products and access to funds, mentors and product launchpad.
Recently got a B1 visa to visit US but I was so uncertain of even that given I am self employed, single, with not much assets and in all ways seem to fit a potential immigrant in the view of the consulate. I couldn't have thought of any way to explain the consulate "a regular job" doesn't interest me and I am not going to take away jobs.
I am sure a lot of entrepreneurs in this part of the world would be blessed and move to silicon valley following their dreams of building a business and fortune.
%10 of 250k company would simply create a visa for money path.
Getting VCs to sit in a government committee and review thousands of visa applications seems rather unlikely, and their success prediction ratio is questionable.
The various legibility profiles I've seen (like those in Canada etc) all seem to filter out Steve Jobs, Bill Gates, Larry Ellison..
Perhaps a solution is to allow investors like YC sponsor something like H1B granted to their companies' founders rather than their own employees.
But, is there really a need for all this? Why does anyone have to be in the US in order to start a company? If anything, shouldn't the web make geography less of an issue?
Good to see that someone is acting on it.
However, the following quote makes me worried about the bureaucracy.
(1) set up a non-government board consisting of credible VCs, entrepreneurs, and lawyers to vet applicants.
It probably is a better solution than what PG proposed in his original essay.
"let the market decide. Startup investors work hard to find the best startups. The government could not do better than to piggyback on their expertise, and use investment by recognized startup investors as the test of whether a company was a real startup."
PG's version would eliminate anyone who would bootstrap a startup without external funding. Brad's is a little inclusive.
I would rather prefer to leave it at "let the market decide."
Any interesting ideas as to how you could convert that statement into an actionable policy for immigration authorities to follow?
I would feel uncomfortable giving recognizable VC firms a competitive advantage in this way. If KP gets to select who gets into the US, chances are they will have a lead on getting to invest in those people.
That said, I also don't like the idea of having a non-government board decide.
Being in the situation myself, I think the implementation Brad is proposing might not be good in the long run (reasons posted by other users).
IMO, any co-founder of the company who owns more than a particular amount in the startup and the startup is at a stage where it can afford paying $100k+ salary to the co-founder should be able to obtain a visa. If the startup is VC funded, even better. But again there should be a complete background check and the startup business plan should be assessed by an independent committee before granting a VISA. Also, educational qualifications of the co-founder should be taken into account like PhDs should get the top most priority.
I am a (US) college senior and i really want to start a company after i graduate. But the regulations just make it so difficult for me. It is good to hear that someone cares enough about this issue to start a conversation.
Thomas Freidman suggested this in "The World is Flat." I liked some things about this suggestion. It doesn't specifically target engineering or science, so it wouldn't distort the market, and a Ph.D (I think Friedman included all doctoral degrees) from an accredited institution is sufficiently rigorous that I don't think it would be as easy to "game" the system.
But still, there are a lot of things I really don't like about this proposal as well.
My experience as a grad student in engineering at Berkeley has left me convinced that these programs are utterly abusive of their students. If there's a shortage of Americans willing to sign up for PhD's in STEM fields, these institutions deserve it. Plus, starting salaries for PhD's in science/engineering lag badly behind MBA/JD/MD programs. This would only exacerbate the situation. And if a Ph.D granting institution is able to award citizenship along with a PhD, there's pretty much no limit to the abusiveness they'll get away with. Hey professors - Want to keep your highly trained poorly paid lab tech around for another year? No problem - you control his dream of citizenship, so trust me, he'll keep working 80 hour weeks for you for $22K a year.
When this sets the standard for treatment of grad students, Americans will all but abandon the field. Expect the already high percentage of foreign students in PhD programs to jump even higher if this becomes policy.
My experience as a grad student in CS at a UC left me with the same conclusion. I left, in ABD status a year after getting my MS because of the working conditions. It makes no financial sense to do a PhD in CS unless you want a pure research or Professorship. I'm significantly ahead financially of my peers who completed the PhD program and professionally as well due to my experience.
Of course there are neat ways for PhD holders to sidestep labor certification to hugely speedup up their greencard applications so I am somewhat being punished for making the saner professional/financial decision!
I think that an employer should be able to offer a job, not US residency. I think an investor should be able to offer money (and advice, guidance, support). But not a green card, no way.
Think of the implications here. A young investor really doesn't need the money. He's ramen profitable. But he needs the investor's permission to be a startup in the us! Well, that's one way for VC's to get the upper hand in an era when their money doesn't matter as much.
Look, I know hacker news folks tend toward the libertarian side and are generally skeptical of government. But I want the people who decide to award green cards to report to the voting public, not to Larry Ellison. I admire PG, but he doesn't answer to me as a member of the voting public, and he shouldn't. Once VCs gain control over the immigration system, they assume a government role, but we can't exactly vote them out of office if we don't like their decisions. And even if you have faith that PG will be a good guy, do you feel that way about "credible VCs and lawyers?"
Winston Churchill said "It has been said that democracy is the worst form of government except all the others that have been tried." Personally, I'm not all that interested in trying out a regime of VCs, no matter how credible a panel has found them to be.
As for the "Green cards to all CS majors" idea, I think a very narrow rule targeting CS would discourage US students from this field, and encourage them instead to pursue more protected degree paths like law. I'm worried about any policy that would drive the already low interest in CS among US students even lower. I also think a University should be in the business of granting degrees, not US residency.