Bloomberg News
By Ellen Huet
February 10, 2016
Standing
under fluorescent lights at a San Francisco hospital, employees of
Medisas Inc. were celebrating the debut of their medical records
software. It was the product
of two years of planning, coding, and countless meetings with hospital
administrators, all driven by Gautam Sivakumar, the startup’s founder
and chief executive officer. But Sivakumar spent that day at a computer
in his childhood bedroom in England.
His
face appeared on an iPad via video chat as colleagues toted him around
the hospital “like a baby,” he recalled. “I’d say, ‘I need to talk to
that person. Can you take
me over there?’” The awkward arrangement was a byproduct of an all-too
common phenomenon among U.S. tech startups: immigration limbo.
When
it comes to starting businesses, immigrants do more than their fair
share. While 13 percent of the U.S. population is foreign-born, 24
percent of tech and engineering
companies created between 2006 and 2012 had an immigrant founder,
according to the Kauffman Foundation, a researcher that advocates for
entrepreneurs. In Silicon Valley, the figure was 44 percent. Among those
founders are WhatsApp CEO Jan Koum and Instagram’s
technical lead, Mike Krieger. Kunal Bahl returned home to India to
build e-commerce company Snapdeal after failing to secure a U.S. visa
upon graduating from Wharton. Snapdeal was valued at $5 billion by
investors last year and employs more than 4,000 people.
There
is no visa specifically designed for foreigners who start companies in
the U.S. A six-year effort to create one died in Congress last year.
Legislation won’t have
a chance at passing until at least 2017 and more likely not until 2022,
said Craig Montuori, an advocate for reform who estimates that hundreds
of founders in the U.S. are struggling to get federal work
authorization. “We got a lot of support on Capitol Hill
and very little opposition, but few people were willing to make it a
priority,” he said.
In
Washington, most of the debate around tech visas centers on H-1Bs,
typically used by big companies and research universities. Lobbying
groups such as Mark Zuckerberg’s
FWD.us say more H-1B visas would keep U.S. companies from losing out on
top talent. Protectionist legislators and Republican front-runner
Donald Trump say they depress wages and take jobs away from Americans.
Either way, H-1Bs aren’t a practical option for
startups because they’re tough to get and meant for employees, not
founders.
Sivakumar,
like many startup founders, applied for an extraordinary ability work
permit, also known as a “rock star” visa because of its use by famous
musicians. (Justin
Bieber has one.) In 2013, after a three-month stint with the business
incubator Y Combinator, Sivakumar incorporated Medisas in the U.S., met
with investors, and began recruiting while hopping back and forth from
the U.K. Once he had applied for a visa, attorneys
advised him not to return to the U.S. until it was approved to avoid
agitating officials. For nine months, Sivakumar lived with his parents
in England and kept California hours, sleeping during the day and
working through the night with a webcam pointed at
his face. He hoped his virtual presence would help his staff of three
feel less abandoned. “We were trying to negotiate six-figure deals over
an iPad screen,” he said. “I didn’t see the sun for four or five
months.”
As
is often the case when the government is resistant to change, the tech
industry has been taking matters into its own hands. Montuori started
the Global Entrepreneur
in Residence Coalition, which works with the University of
Massachusetts at Boston and the University of Colorado at Boulder to
wrangle the schools’ H-1Bs for would-be founders. Unlike companies,
which enter a lottery for a limited number of H-1B spots each
year, colleges can apply for as many as they want. The group said it
has secured about 10 for startup founders so far.
Unshackled,
a $4.5 million venture fund, has taken a more radical approach. The
fund offers H-1B visas and as much as $160,000 to immigrant
entrepreneurs in exchange for
5 percent of their companies. So far, Unshackled has doled out a dozen
visas. “The same way a developer looks at a code base and comes up with
the best product solution, we’re going to look at the legal code base
and come up with the best way to support immigrant
entrepreneurs,” said founding partner Manan Mehta.
The
legality of Mehta’s immigration hack is questionable, said Peter
Roberts, an immigration lawyer who works with Y Combinator. H-1B workers
are only supposed to be paid
by a single employer, and stock in the founder’s own startup could be
considered a second source of compensation. “It’s a legal gray area,” he
said.
Sharon
Rummery, a spokeswoman for U.S. Citizenship and Immigration Services,
referred questions about the programs to a statement saying visa
applicants should consult
the application forms. Senate Judiciary Committee Chairman Chuck
Grassley (R-Iowa), who introduced a bill in November that would limit
visas, said H-1Bs weren’t intended for entrepreneurs and that such uses
undermine the visa’s purpose. “The original intent
of the program is good,” Grassley wrote in an e-mail. “But the abuse of
the system is real.”
Australia,
Canada, Chile, and other countries aspiring to create the next tech hub
are trying to capitalize on the U.S.’s foot-dragging. They’re appealing
to entrepreneurs
with special visas and tax breaks, though the programs lack the allure
of Silicon Valley. “The U.S. is where these founders really want to be:
The market is bigger; the VCs are here,” said Tahmina Watson, an
immigration attorney. “They want to be here, yet
our laws are not changing.”
For
now, some founders have remained in the U.S. on tourist or business
tourist visas, which forbid working or earning money while in the
country. Deferring compensation
is doable, but what constitutes work isn’t well-defined. “Is talking to
investors work?” said Bastian Lehmann, CEO and co-founder of the San
Francisco courier startup Postmates Inc. “If it is, you’re not supposed
to do it. But it’s not a rule. It’s in the
opinion of the border guard that you happen to talk to.”
Lehmann,
who’s a British citizen, spent Postmates’s first year ducking in and
out of the U.S. on a tourist visa. He was always fearful of crossing a
line that could get
him banned. Eventually, he secured a visa tied to his job, but that
presented new problems. “As CEO, you want to build a large company. But
every nine months, you have to get your visa renewed, and suddenly the
company is 80 or 90 people, and you’re like,
‘S---, I hope nothing goes wrong with this extension,’” said Lehmann,
whose business now has about 240 employees. “The higher the stakes on
what you’re building, the weirder that feeling becomes.”
Applying
for a visa takes at least six months of work and can cost $10,000 or
more in legal fees and other expenses. It also takes a mental toll.
“When you talk to other
people in San Francisco, you don’t want to talk about these visa issues
that make you cry every day,” said Aurora Chisté, an Italian
entrepreneur who spent a year and a half trying to build up her company
in the U.S. while visa delays kept her out. “You know
that every day is a day they could kick you out of the country, but you
hide those things because you know it could affect business.”
It
could indeed, said Jeff Bussgang, a general partner at Flybridge
Capital Partners. “VCs don't want to invest in entrepreneurs who are at
risk of being sent away,” said
Bussgang, who has been involved in efforts to establish a founder visa.
“It’s a huge distraction.” In Riga, Latvia, Browserling Inc. co-founder
Peteris Krumins has been waiting for six years to get his business
tourist visa renewed. His U.S. co-founder has
moved on from the app-testing venture. “Our partnership fell apart,”
Krumins said.
Sivakumar’s
story has a happier ending. In July 2014 he got his rock star visa to
work for Medisas and no longer has the threat of deportation looming
over his head. Still,
he can’t help but wonder what might have been. Medisas has 20
employees, instead of the 60 or 70 he said it could have had without his
year of delays. “We were in hibernation mode,” Sivakumar said, “until
this was resolved.”
For more information, go to: www.beverlyhillsimmigrationlaw.com
No comments:
Post a Comment