After trying and failing to get their startup Udemy, an online education platform, off the ground in their native Turkey, Eren Bali and Oktay Cağlar headed to the United States in 2009. Both knew that in the U.S., specifically Silicon Valley, they could gain the support and traction that Udemy needed. Yet Udemy was not enough to gain them entry into the country: The United States does not have a visa specifically for entrepreneurs eager to launch businesses.
Instead, Bali and Cağlar applied for jobs with tech firms that sponsored them for H-1B visas. Both worked at SpeedDate, an online dating platform, during the day, while working on Udemy after hours. Yet it was when Bali and Cağlar were ready to leave SpeedDate, having raised funds to formally make a go of Udemy in 2010, that they got stuck. Leaving SpeedDate meant giving up their respective H-1B visa status. Bali and Cağlar applied for an H-1B through Udemy. Bali’s was accepted; Cağlar’s was rejected. Bali could stay in the U.S. Cağlar had no choice but to return to Turkey until a new H-1B was approved.
“It was a difficult arrangement,” Bali told me. Still he and Cağlar made it work. To date, Udemy has raised $173 million and employs around 250 people. Its platform is used worldwide and poised for further growth.
Immigrants have played an important role in boosting America’s economy. They have founded iconic companies such as Proctor & Gamble, Kraft, AT&T and, more recently, eBay, Facebook, Google and SpaceX. More than one-third of 2015’s Fortune 500 companies are connected to an immigrant entrepreneur. Twenty-five percent of the U.S.-based startups valued at a billion dollars or more, popularly referred to as “unicorns,” have an immigrant behind them. Together, these companies are worth $70.9 billion.
It is time to re-evaluate the U.S. immigration system — to create more opportunities for entrepreneurs abroad to come to America for the specific purpose of starting a business. Specifically, Congress needs to pass a permanent visa for immigrant entrepreneurs.
On August 26, President Obama made good on a long-awaited promise: The White House announced plans for a new International Entrepreneur Rule that would allow some immigrant entrepreneurs to work legally in the United States for up to five years. Originally promised in his executive actions on immigration from November 2014, the proposed rule marks an important step forward in maximizing the economic potential of immigrant entrepreneurs in the United States.
However, the rule has limitations — chiefly, it could be changed or revoked under a new White House administration in 2017. It falls to Congress to build permanent channels — visas — for immigrant entrepreneurs after failing to do so for years.
Only Congress can legislate permanent solutions for immigrant entrepreneurs.
Since 2010, Congress has been presented with several draft “Startup Visa” bills. None have been debated or put to a vote. Politics has gotten in the way.
The “startup visa” has fallen victim to the larger discussion about immigration and, particularly, the larger question of security. Indeed, the U.S. determines who may or may not enter the country on criteria that prioritizes security — whether the applicant is perceived as a threat or not — over skill and any potential economic value-add.
Other countries recognize the importance of immigration to economic growth. Australia, Canada, Chile, France, Germany, Ireland, Singapore and the United Kingdom all have startup or entrepreneurship visas that encourage individuals eager to set up a business to immigrate to their respective countries.
And why wouldn’t they? Immigrants are twice as likely to start businesses as their native-born peers. In a 2007 study, AnnaLee Saxenian, the dean of the University of California at Berkeley’s School of Information, and entrepreneur and author Vivek Wadhwa found that more than half of Silicon Valley startups had one or more immigrants as a key founder. According to Inc., in 2012, immigrant-founded engineering and technology companies in the U.S. employed 560,000 and generated $6.3 billion in sales.
Across the United States, local governments have begun developing their own initiatives to reach out to entrepreneurs. Massachusetts launched the Global Entrepreneurship in Residence program, which allows entrepreneurs to build businesses while maintaining employment at local universities. Michigan aims to keep more of its international science, technology, engineering and mathematics (STEM) students with a Global Talent Retention Initiative. Cities such as Cleveland, St. Louis and Detroit have programs to help immigrant entrepreneurs cut through red tape.
But within the context of national immigration policy this is not enough. States do not determine immigration policy. Only Congress can legislate permanent solutions for immigrant entrepreneurs. While Speaker of the House Paul Ryan has indicated that his chamber won’t take up the issue of immigration reform until 2017, Congress can and should move forward with other legislative proposals that would build both channels for and pipelines of immigrant entrepreneurs.
As I recently argued in a piece I wrote for The Chicago Council on Global Affairs, Congress can (and should):
- Create a visa for entrepreneurs: The Startup Act would create a permanent visa category for entrepreneurs to start and grow businesses in the U.S. The bill calls for 75,000 temporary visas, which could become permanent if the entrepreneur meets hiring and investment requirements after three years.
- Expand opportunities for STEM students: The majority of students studying science, technology, engineering and math (STEM) come from abroad. Keeping these students, already integrated in the U.S., not only makes sense, it helps economically. The Startup Act carves out 50,000 visas for foreign students who graduate from U.S. universities with a STEM degree. The STEM Jobs Act calls for 55,000 visas for STEM graduates. Let’s get these passed.
- Improve existing investor visa programs: While neither is technically a startup visa, many entrepreneurs successfully enter the U.S. on EB-5 or E-2 investor visas. But both visa programs have application hurdles that can only be addressed via Congressional legislation. The EB-5 program requires a $1 million investment in a business, putting it out of reach for many entrepreneurs. Let’s streamline the application process with improved monitoring and measurement.
When talking about the impact of immigrants on the United States, President Lyndon B. Johnson noted, “The land flourished because it was fed from so many sources — because it was nourished by so many cultures and traditions and peoples.”
Entrepreneurship and immigrants have been a critical part of the American economy and prosperity. It is vital that we continue to find ways to welcome them.