One of the parlor tricks I like to perform when starting off any Silicon Valley talk or presentation is to ask the audience to raise their hand if they currently live in the area. Most people raise their hand. I then ask the people who were born in Silicon Valley to leave their hands up. Generally, in a room or say 1,000 people, maybe ten or fifteen still have their hand up.
That’s what makes Silicon Valley so special – it welcomes people from all over the world to come and build their dream. There is less racism, classism, sexism, or general prejudice here than anywhere else I’ve been. Part of it is the unique history of the bay area (See Berkeley and San Francisco), and part of it is that hyper-competition has no place for prejudice, it simply gets weeded out.
Perhaps the only thing that can destroy the ecosystem here is the U.S. government going out of its way to mess everything up. In particular I’ve been concerned about H1B visa quotas that severely limit the number of foreign workers that can come here legally. It’s something that I asked each of the presidential candidates I interviewed about. Listen to the interviews here, and see each of their positions on H1Bs here. I was also very happy to see Congress starting to take action to increase the quotas.
So, the timing on this guest post is good. Peter Nixey is the founder of Y Combinator startup Clickpass, an idea born in the UK and brought to the U.S. with the Y Combinator funding. Clickpass launched last month.
Peter wrote the post below chronicling his 5+ month effort to move his company legally to Silicon Valley. It is my sincere hope that sometime soon, entrepreneurs will be able to avoid many of these administrative hassles, and focus entirely on growing their businesses.
While the Silicon-Valley v. Rest-of-The-World debate rages on and on there are still some companies for whom it’s essential to be in the heart of the industry. Getting a visa to come the valley is not easy though and with more first generation immigrants than almost anywhere else I’ve been, every San Franciscan foreign accent has a war story of how they battled their way into California.
This is the story of how we brought Clickpass to California and how a holiday turned into a pitch turned into a company and finally into a successful product.
Visiting San Francisco
Today Clickpass is a platform servicing websites with tens of millions of users, a team of developers and an E2 visa to trade in the US. Almost 12 months ago to the day though it was little more than a vision and a dash of technical insight.
After having turned the idea over and developed it for several months in London we happened to be on a trip to San Francisco visiting the Auctomatic founders who at the time were on Y-Combinator. As well as seeing the California hills I wanted to speak to as many people as possible and to understand what the receptiveness of the community was to the OpenID platform we were proposing.
The inevitability of immigration
We managed to get a lot of meetings. Both Keith Teare and one of his platform architects took time to go through our business proposition, Chris Messina and I spoke for hours about how to bring the usability we were planning to OpenID whilst still staying true to the core open-ness of the protocol. We spoke with engineers at Google, Ben Bangert who was implementing OpenID at O’Reilly and then finally were invited to apply for Y-Combinator by Jessica Livingston.
At this stage we’d still only been in California for five days and it was already obvious that San Francisco was the right place to do what we were planning. The energy, expertise and density of web-tech companies was alien to anything we’d ever experienced in London or Oxford. Knowing the move wouldn’t be easy we immediately approached an immigration lawyer to find out what options were available.
Choosing a visa category
There are a number of different visa categories, each of which is designed to service different requirements. As a company looking to set up shop in San Francisco there were only a few which were relevant to us.
H1B: Temporary workers and trainees
Since being rationed by congress H1B’s are like gold dust to get hold of and swamped by large corporations. There are so many issued each year and by the time we were investigating the previous year’s quota was already full.
L1: Intra-company transfer
The L1 allows for a company to make an internal transfer of an employee with specialist knowledge required to direct the American component of a company. Technically it’s possible for a startup to create a company in both their home country and the states and then to transfer across. However it is obviously a very flimsy premise for the visa and is also likely to be difficult to defend since the L1 requires the the company still do a significant part of its business in the country of origin.
O1: Alien of Extraordinary ability
Although we originally disregarded it, the superbly named “Alien of Extraordinary Ability” visa has proved to be one of the most popular choices amongst people I know. There is one particularly good lawyer called Chris Wright of the Wright Law Firm who has an excellent reputation for success in this field.
E2: Treaty investor
The visa which we applied for was the E2, foreign investor visa. If you’re from a qualifying country and you can invest money in your business then the E2 is the perfect visa to look at.
The key advantage of the E2 is that once the company has jumped through the necessary hoops to be granted E2 status, the transfer of its employees is far easier. Whereas most other visas need to be applied for on a person by person basis, the E2 applies to the company itself and not a particular individual. This means that even though the initial application process takes months and months, subsequent key-employee visas can in theory be arranged and issued in a matter of weeks.
E2: A world of catch 22
Getting the E2, however, is an arduous process. At the time we applied, the delay between submitting our application and actually being granted an interview was five months. Not only that but the visa also requires you to demonstrate that you are irreversibly committed to doing business in the US.
You need to show that the necessary funds have been invested and are already at work which means that should you fail to get the visa… you’re irrevocably committed. Not a great position to be in.
Showing that commitment requires evidence of expenditure on US employees, an office lease, bank accounts, tax returns and purchase receipts for equipment. Unfortunately those are exactly the type of things that the US border officials do not like to see.
Pack lightly and smile sweetly
The E2 requires demonstrating to the Visa officials that you are committed to and investing irreversibly in the states.
At the same time though you need demonstrate to the border officials that you’re leaving as soon as return flight is due and not intending to return. You certainly shouldn’t be bringing anything into the country that indicates you’re intending to stay for longer than 30 days (local bank cards, photo albums, US cellphone etc.)
We did three long (i.e. almost 90 day) trips before our visa interview and although we never overstepped any of the regulations, entry was hairy during entry on our second and third visits.
Fortunately for me the guard on my third visit hated the number of passwords he needed to do his job and when he found out what Clickpass was doing, wished me luck and waved me on through.
The majority of the E2 requirements, business plans, rent, investment etc. are well defined and achievable. However two of the things you need are a bank account and also, ideally, payroll for any US employees.
In order to get these though you really need social security numbers. You can’t get an Social Security Number SSN without being a US resident which means instead getting either an EIN (Employer ID Number) or an ITIN (Individual Tax Payer Number) both of which are a PAIN.
To cut a long story short, despite our best bureaucratic wrangling we were unable to attain ITINs. As if from nowhere though, an EIN popped out of a random conversation we were having with an official who it seems we charmed / confused into co-operation. It seems out that EINs actually require almost no paperwork and that the main thing required is persistence.
It took five months from submitting the application to being granted a visa but finally in April of this year it was time to plead our case.
The visa interview takes place in the individual’s country of origin and for us that meant the American embassy in London. The embassy is a little like being in a bank as all the interviews are done standing up and through thickened glass windows.
After arriving at 8AM and watching about a thousand Camp America teenagers collect their J1’s, I waited for four hours before I was finally called up and to the E2 window.
The documentation we had submitted ran to over a hundred pages but the officer dealing with us was was very familiar with all of it. Given the varied nature of the applications he sees I was impressed with how much time he’d taken to understand and study our application.
We had some excellent advice from the law firm we were using in London and as well as having already submitted one large file of information I also took another two files worth of supporting documentation. This included bank statements, press coverage of Clickpass and letters of support from Valley luminaries. I ended up needing almost every single document.
The interview lasted about three quarters of an hour and at the end at the end were granted a two year extendable visa to live and operate in the US. After twelve months of waiting, hundreds of hours of preparation and thousands of dollars worth of legal costs the relief of being granted the visa was almost overwhelming.
Not only would the consequences of denial have been catastrophic to the company they would have also meant that I as an individual could no longer travel under the visa waiver programme and despite being a British citizen, would have had to apply for a visa every time I visited.
When to go for it
The visa application process is expensive, very time consuming and very energy consuming. It saps time, attention and energy away from the core thing that any young business needs to do which is to grow.
There are many companies for whom that distraction simply doesn’t make sense. For us though I have no doubt that it was essential. Only weeks after launch, Clickpass is seeing thousands of registrations a week and the influence, support and partnerships that the company made in Silicon Valley were critical to that early success.
Although my first choice of base would always be London, I have no doubt that as a young technology team we would not have had the success we did had we stayed. Getting the visa was not a whole bundle of fun but if I had to go back and do it again I wouldn’t hesitate for a second.