The Startup Visa Act and Dream Act are crap. Why do we insist on building on our broken immigration policy?
We need to make immigration simple for all immigrants. We don't need to create more laws that require an immigrant to spent $100K in legal fees to some lawyer to fill out paperwork.
I think YCombinator has proven that a startup doesn't need tons of funding to get an idea going.
The biggest problem with government is they over complicate EVERYTHING! We need simple solutions to the problems, not another stack of laws to add to the (literal) truck load that already exists.
We need one (1) page form that someone can fill out to get a visa. If someone comes from Mexico (for example), they should be able to fill out this form and get a Visa the same day. If someone flies in from Germany they too should be able to fill out this one page form and get a visa right at the airport. There is no reason why someone should have to have $100K in funding for a business, another $100K for legal fees just to get in.
I think the approach should be applied to everything government does. Simplify, Reduce, Eliminate.
Another good example is paperwork to start a business. I should be able to fill out a simple form and be able to have a business up and running (Legally) in any city/state in the US - the same day I fill out the form. I don't understand why places like New York City make these kinds of things so difficult. It takes MONTHS to get a business LEGALLY up and running in a major city like New York, but that same business can be LEGALLY up and running in 1 day in Hong Kong.
I can't agree more. There are already visas that cover every letter of the alphabet and several subclasses. We don't need more visas we need competent immigration reform.
Also, no one has been able to explain to me how someone in another country needs a visa for an idea they're working on. If the country they are from is hostile to startups isn't that something that should be taken up in there. I don't take issue with those that wan't a startup visa to be created. I take issue with the reasons given of why it should exist at all.
While you're right that Y Combinator (or, rather, companies it has sponsored) has demonstrated that minimal funding is required, there is no harm in a government trying to secure the best for its citizens. Nothing says the United States, Canada, Germany, France, Australia, Japan, China, India, or any other nation on the planet must make it easy for an immigrant to enter and establish a business. Least of which, establish a business that requires minimal presence and that can direct its expenditures to any other country. Put another way, if you were the Minister of Immigration, would you prefer to have the cloud-based start-up with 4 employees, two of whom want to live in your country, or do you want the datacenter that has millions of $currency_units worth of equipment that can't easily be forklifted out of the country?
To address your second point, without making any pass at politics: Someone once said that states are laboratories of democracies; therefore, each state conducts its internal affairs differently. Michigan allows the formation of a Limited Liability Company with nothing more than the payment of $175 to the state and an online form (ironically, the link to that form appears broken at the moment). Texas is more expensive--$325 for a LLC or a corporation--but offers the same thing. Both states have minimal requirements for non-residents forming and operating corporations under those states' laws, so if NY doesn't suit your needs, there is "something for everyone," even when creating a business entity.
I too would love to have a dramatically simplified immigration policy, but political reality makes any kind of vast, sweeping reform really unlikely for at least the next several years (probably longer, but I'm not willing to predict that far).
Sure, neither the Startup Visa Act nor the Dream Act go far enough, but they're steps in the right direction, and if we oppose such measures on the grounds that they aren't big enough, it's going to be much harder to get anywhere. It's always easier to convince people to make 20 small changes than it is to convince them to make 1 big one that's 20x the size.
I don't understand the funding requirements... Take someone like patio11, who's running a profitable business but not making a killing with it yet. Why not let him immigrate to the US, and run his business (and pay his taxes) there?
And what about someone who ran and sold a successful business in, say, Germany, and decides they would like to live in the Valley for a while. Let's say that person has a couple of hundred thousand dollars of wealth, is a proven bootstrapping entrepreneur, and wants to move to the Valley and bootstrap the next Facebook... Why stop them at the border?
Many valuable people want to move to the US, but by making it so damn difficult, the US misses out on enormous amounts of top talent.
Why not, instead, make immigration a straightforward process for anyone with some set of criteria, e.g. recognised science education or other degree from a top university, or track record of entrepreneurship, all of that with good credit score and no debt ... it makes sense to have entry requirements, but why are they so arbitrary?
It's downright quirky that I can get a visa to do it from Japan, a country which, ahem, has not historically been known for its welcoming embrace of foreigners. (Long story short: my previous employers know how the game is played, and keeping a status of residence once you have it is pretty trivial: pay taxes, file forms in a timely fashion, and don't get arrested.)
A green card is equivalent to Japanese permanent residence, which I don't have. (I would theoretically have been able to apply for it six months prior to leaving the day job, which would result in me getting it about a week prior to leaving the job, but the day job would have had to go to bat for me to get it and I thought telling them to go to bat then quitting would be discourteous. My odds of permanent residence prior to marrying a Japanese woman now are exactly equivalent to my odds of being featured on the front page of the Japanese economic newspaper, since any success in my business sufficient to justify one would justify the other.)
As for the small(er) business argument, there are a couple of factors:
1. This visa isn't meant to solve every problem. As soon as you try to solve every problem, you've just guaranteed you're not going to solve any problem; and
2. Arguably someone who is small isn't yet of interest to the American government in terms of being a taxpayer.
As for the successful investor example you've made, you've chosen a (quite deliberate, imho) strawman. The argument has several holes:
1. If you have $1m or more to invest in a business, there is an existing green card program for that;
2. I believe you know this, which is why you've said a couple of hundred thousand. The line has to be somewhere. 5-10 years ago, at least for tech companies, $1 million probably made sense. Does it make sense now? Maybe not. If not, address it by changing the requirements for that separate visa class; and
3. The American government has a vested interest in fostering businesses of American citizens and residents rather than those of foreign residents; and
4. If that person was going to seed invest (ie become an angel), a couple of hundred thousand isn't really enough to do that. Each "bet" they make, even if only $25,000 is simply too high a portion of their total investment pool.
As for the requirements being arbitrary, that's a double edged sword. Sure $1m is enough for an investment-based green card. Why not $950,000? Again, the line has to be drawn somewhere. After all, you're a minor up until you turn 18. Is someone 17 years and 11 months old so vastly different?
The positive side of arbitrary requirements is that they have certainty. Someone can look at those rules and clearly know what they mean and whether or not they qualify.
To give you a counterexample, in Australia the ATO (our equivalent of the IRS) has a discretionary test to decide whether you're "in business" to see if you can manage your tax deductions in a certain way. It's completely vague, sort of a "you'll know it when you see it" kind of test.
The problem of course is that there are still grey areas and humans need to make decisions about whether a given situation qualifies or doesn't.
Arbitrary rules are clear, yet, but also blunt. If you were building a capital intensive product (see most of the alternative energy/biotech space - to get a prototype built costs millions and millions of dollars in most cases), 250k investment is really low, and probably would have no bearing on the success of a company.
But for a small tech/software company whose only expenses are its 2-3 founders' accommodation and sustenance, 250k is a lot. So maybe some arbitrary rules are the right thing, but there needs to be some common sense and differentiation across different sectors. Not all startups are the same.
The current E2 visas don't include a hard-and-fast minimum investment. It has to be sufficient, though : and the interviewer in the Embassy will be the judge of that, ultimately.
For an Internet technology startup, $100k is enough (proven in 1999, and renewed ever since).
I completely agree; there should be a far less arbitrary and obtuse set of criteria.
I would love to move to the Valley (I'm Canadian) for everything that is there, but there is no outlet for founding a company and moving it south of the border without jumping through multiple legal hoops. I have no debt, I'm not going to go on benefits, I pay my taxes, I have a good degree from one of the world's best uni's, I'm driven, resourceful, etc. Why is there an arbitrary, xenophobic law preventing me from doing so? Canada (and now the UK) seem to provide a much more sensible set of regulations that promote entrepreneurship which have huge and wide-ranging impacts on the local economies.
Take someone like patio11, who's running a profitable business but not making a killing with it yet. Why not let him immigrate to the US, and run his business (and pay his taxes) there?
In fact any person anywhere in the world whether American or not can volunteer to pay taxes to the US government even if he doesn't have a single US-based customer. All you have to do is incorporate in the US with an American nominee director+secretary and yourself as the sole shareholder. Then it's up to you whether you want to tell your local government about all the profits your American business is raking in.
Delaware in particular makes it hard for foreign governments to find out exactly who owns a particular corporation there. This is why you sometimes hear America referred to as the world's largest tax haven:
http://www.lectlaw.com/filesh/bbg33.htm
However, for an American citizen living overseas and trying to run a small business, the main reason to incorporate in the US (rather than whatever country you're living in) is not to evade foreign taxes, but to avoid American paperwork. American owners of foreign corporations have to file form 5471 and spend all their time worrying whether any of their income can be classified under Subpart F (particularly Foreign Base Company Services Income --- look it up if you'd like your head to explode), in which case it DOES get taxed in the US as if it were a dividend to you personally. If you're Google and you want to pretend that your office in Bermuda with zero programmers and three lawyers is actually a major profit centre for software income, this is easy. If you're one guy selling bingo software, this is much harder, because you don't have the money to hire an international tax lawyer. Thanks President Kennedy!
Right now all the multinational corporations are deferring US taxes on their foreign subsidiaries by using Form 8832 declarations to create "hybrid entities" (ones which different governments disagree are corporations or pass-through entities). This all started back in 1997, when the IRS amended the entity classification rules in response to perceived abuses. Next year that law might get amended to make that impossible (Obama already tried last year, but failed), at which point all the high-priced accountants and lawyers will comb through the new regulation to find some other bright idea, while I hide under my pillow and cry.
Anyway, rant over, here comes the point I promised: US laws, whether in the field of immigration or taxation or whatever, may start out simple, but they inevitably get amended into increasing complexity until they make no sense at all, because unlike, say, the laws of Vanuatu, there's so many people looking for loopholes. Thus the laws manage to ensure that no one abuses process X, by making it damn near impossible for anyone, abusive or not, to get through process X in the first place. So I don't really have high hopes for this startup visa bill. It may pass, and in the first year hopefully some genuine foreign entrepreneurs will grab on to the chance to get a foothold in the US. But then there will be abuses, or maybe only perceived abuses blown out of all proportion by the media (or by disgruntled competitors who use PR agents to plant stories in the media), and then the law will get amended into oblivion starting from year two.
From what I've seen so far this year in bills pushed by the House and Senate that had provisions to assist small businesses and entrepreneurs that have C-corps were weak at best. The originally proposed health legislation pushed by Reid and many other Democrats would have hurt small businesses hard, so they had to tone it down. Finally, a good bit of what I saw in Democratic campaigning this Fall seemed nationalistic, complaining that Republicans were sending jobs overseas, and implying that these Democratic candidates valued Americans getting jobs over foreigners. So, someone try to change my mind and prove to me why Reid and Kerry would be for legislation that would make it easier for foreign entrepreneurs to be successful in the U.S.? Sure Dick Lugar is a Republican, but this post seems to push the idea (imo) that Democrats want to help foreigners make money and that they are pro-small business, neither of which I have seen much evidence of recently. I don't believe Republicans will be loads better, btw. Small businesses and entrepreneurs aren't the most influencial lobbyists in the world, and while angels and VCs have some pull, the only reason they are getting attention now is because supporting small business and entrepreneurs is a politically popular idea.
If you have to get 250k under that law (versus 500k-million under the already existing immigration law) then it isn't going to help startups at all, the only thing it is going to do is to prevent a real startup visa law from ever being passed.
A real startup law would not put capital requirements on the company but would require its founders to be able to live of the income and to either hire people or grow a certain amount each year, which some checks to prevent them from being consultants.
Current law allows for investment-based immigration, meaning that if you have a certain amount of money to invest in a business you can be granted a conditional green card based on the idea that you'll be creating jobs.
The startup visa would allow foreign entrepreneurs to come to the US if they could secure funding from legitimate angels and VCs.
The first situation allows foreign nationals with foreign money to establish businesses (and residency) in the US. The second allows US residents to establish businesses with foreign entrepreneurs, which is almost the exact opposite of the first.
The competition is already super tough for getting good help. The talent pool is limited, so this seems rather zero-sum. The kind of people you want already have jobs, so this isn't creating any.
And startups are uncertain enough without adding that the CEO is here on a temporary visa. It's going to be even tougher to hire people.
I can see it as a nice thing to do on an individual level (so people with dreams who just weren't born here get a better shot at them), but is there a compelling case outside of that?
The majority of startups and small businesses are completely expendable and interchangeable as far as society is concerned; "Most small businesses exist to provide the owner's family with an upper-middle-class lifestyle."
We need to make immigration simple for all immigrants. We don't need to create more laws that require an immigrant to spent $100K in legal fees to some lawyer to fill out paperwork.
I think YCombinator has proven that a startup doesn't need tons of funding to get an idea going.
The biggest problem with government is they over complicate EVERYTHING! We need simple solutions to the problems, not another stack of laws to add to the (literal) truck load that already exists.
We need one (1) page form that someone can fill out to get a visa. If someone comes from Mexico (for example), they should be able to fill out this form and get a Visa the same day. If someone flies in from Germany they too should be able to fill out this one page form and get a visa right at the airport. There is no reason why someone should have to have $100K in funding for a business, another $100K for legal fees just to get in.
I think the approach should be applied to everything government does. Simplify, Reduce, Eliminate.
Another good example is paperwork to start a business. I should be able to fill out a simple form and be able to have a business up and running (Legally) in any city/state in the US - the same day I fill out the form. I don't understand why places like New York City make these kinds of things so difficult. It takes MONTHS to get a business LEGALLY up and running in a major city like New York, but that same business can be LEGALLY up and running in 1 day in Hong Kong.