The Founder Visa

http://www.paulgraham.com/foundervisa.html

by pg • 17 years ago

200 151 17 years ago

pclark2• 17 years ago

I'm sure WebMynd would appreciate it

yan• 17 years ago

I'm thinking: how can this be exploited? Can someone just say they're building a new way to shorten urls and need two years in the country to build their business to fruition? And what defines success or progress?

pclark2• 17 years ago

investment

pg11• 17 years ago

That's why you use investors as the test.

I don't think you need to define progress.

shiro3• 17 years ago

There are big companies hungry for H-1Bs; could they exploit this new visa by "investing" small amount of money and then outsourcing some of their work into this newly created "company"?

tomsaffell2• 17 years ago

If someone did apply under false pretenses, get here, and do nothing, then what would be the negative impact on the country?

PG's suggestion was that they cannot work for other companies, so they are not depriving anyone of a job. They will have to live somehow (on whomever's money they have), and that will go into the local economy. If you add a clause to the visa that they cannot claim any type of social welfare, then I think the potential downside of 'gaming' nowhere near outweighs* all the potential upsides.

* - opportunity cost of the 10,000 spots excepted, which is why you have the right folks picking the 10,000.

calambrac• 17 years ago

Maybe add a requirement to hold in escrow enough money to ship the person back, for the case where their startup fails?

erlanger3• 17 years ago

I worked full-time is a freelancer for quite a while. Nobody asked for my papers, and I won't say anything about taxes. I could've easily laid low when (the few) clients called asking for info (SSN, etc.) for my 1099s, as income was distributed well enough that none would think it a big deal to not send me one.

There's an underground economy, and it doesn't always involve narcotics/guns/prostitutes/dog fighting/etc.

While I deposited checks (one potential obstacle), I don't think anybody would have quaffed if I asked them to pay me via PayPal, where I could transfer the money to a friend's ("accomplice's") bank account.

gills• 17 years ago

Here's a random attack vector.

Step 1. Pay lobbyist to add the following clause to the rules: "Treasury will provide 20:1 non-recourse loans to participating investors" -- to attract the 'hot money' and foreign capital, of course. Just copy the clause right from PPIP, in case you think it's not possible.

Step 2. Wealthy foreign investor: send random minion on 2-year luxury vacation to the U.S. Invest in minion's "startup" through some convoluted channel (perhaps a Wall St. Bank's unofficial immigrant startup investment fund).

Step 3. Sell "consulting services" to minion's startup using your U.S. shell company.

Step 4. Free Money.

Obviously there are good and easy ways to prevent this absurd little tinfoil hat scenario I've constructed in the bat-filled cavern where my brain should be. But considering the recent track record of our government botching up finance-related issues, I wouldn't expect anything less...

alain940402• 17 years ago

Having been through the hoops, I'd generally support this, but it's a tough sell in today's economy. Because there are emotions involved.

There are already similar visas (EB-5 and E-1). Especially the E-1 category is very close and could easily be amended to fit Paul's ideas (I used the E-1 as co-founder of my previous startup, EVE).

One issue that needs to be addressed: you are not likely to get funding until you move here. But if the visa gives you a grace period (say 6 months) to move first before you get funding, then it will be abused.

ajju6• 17 years ago

Care to elaborate on how you got through the hoops?

Many (or most) of the people taking advantage of such a visa might be those already in the US on student or work visas.

alain940402• 17 years ago

Here are some details based on my personal experience (I have been under 6 different visa status over the last 15 years).

There is a misconception that an investor visa requires cash investment (in the order of $500K to $1M). That's false. This number comes from the EB-5 green card route. The E visa is a temporary visa, but it is valid 5 years and renewable pretty much as long as you want. There is no minimum cash investment required in the statute.

You do need to convince the US embassy of your home country that you have a good business plan. Actually, to be convincing, it better be more than a plan: early customer interest, letters of intent (LOI), etc. all constitute strong elements to include in your application.

In line with PG's idea, letters from prominent VCs about their interest may work as well.

For about $6,000, you can get a good, proactive immigration lawyer to prepare your case, assuming your business opportunity is real.

dfranke2• 17 years ago

> you are not likely to get funding until you move here

I think it's likely that if this visa existed, VCs would adapt to it by becoming more open to funding people who haven't immigrated yet.

tptacek• 17 years ago

VC's barely (meaning, almost not at all) adapt to citizens who haven't yet moved to Boston or San Jose yet.

trapper2• 17 years ago

Can anyone think of a wonderful business (think truly great) that couldn't get funding until they were in the US?

From what I have seen there is tons of money if your model is great.

I think the counter is true: it's much easier to raise money for bleeding edge ideas in the US. But, ask yourself whether you want to be doing a bleeding edge business (e.g. based on twitter or facebook) or one thats more likely to make you wealthy (B2B).

siong1987• 17 years ago

It is bad that E1 is only available for certain countries. My country is not in the list.

Is there any other options?

hko• 17 years ago

> you are not likely to get funding until you move here

Not so: people could do the initial work for startups on student and H1-B visas, which they could then convert if they got funded.

Kadin• 17 years ago

I was a bit disappointed that the author of the article didn't address the difference between what he was proposing and the existing investor visas. They seem pretty close, to the point where what he's seemingly asking for could be achieved by tweaking existing programs rather than creating entirely new visas. The intent and purpose of the investor visas are exactly what's being discussed: bringing talented people to the U.S. so they can start businesses that employ Americans and contribute to the economy.

If those programs aren't doing what they're supposed to do, or if they have capital/investment requirements that aren't in line with what modern high-tech companies require (i.e. modern startups don't require as much as the minimum investments for the visas) then we should address that, but I don't think it needs to be done from a blank slate.

(Information on immigration through investment <a href="http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f..., assuming that link is stable.)

ajju6• 17 years ago

Thankyou pg for writing on this topic!

tc2• 17 years ago

This line made me smile:

I think this would have such a visible effect on the economy that it would make the legislator who introduced the bill famous.

It reminded me of "Law 13" of "The 48 Laws of Power":

uncover something in your request... that will benefit him, and emphasize it out of all proportion.

http://news.ycombinator.com/item?id=555691

jmtame• 17 years ago

Probably true when you look 4-5 years into the future and some of these seed companies start growing out into real, profitable, sustainable businesses.

tc2• 17 years ago

Can you point to an example where a politician has received unequivocal credit or blame for something he or she did 4-5 years ago? It often seems that the look-back period is only about two weeks. The enormous cost of Sarbanes-Oxley to US competitiveness doesn't seem to have adversely impacted the careers of Sarbanes, Oxley, or the numerous other legislators who voted to enact the regulation.

pg11• 17 years ago

Surely it's more an example of Rule #1.

tokenadult2• 17 years ago

A risk might be that if even one Al Qaeda terrorist gets in under this program, then the whole program will be shut down, and the sponsoring member of Congress's name will be infamous forever after.

pcc• 17 years ago

There would probably have to be some monitoring that visa recipients are actually engaging in start-up activities; in which case there shouldn't be time for any terrorism...

ajju6• 17 years ago

Good VCs vet potential investees better than the FBI does. And that is true without the risk of being blamed for enabling a terrorist. Think about how well a VC would vet someone coming in from outside the country. (How well they can vet such a person is a separate but important issue).

And at least one of the 9/11 hijackers came in on a student visa. The student visa program has not been shut down (although checks for all visa programs have become more stringent).

jey2• 17 years ago

That's a good idea. The visa system generally makes it hard for hard-working highly-motivated highly-educated foreigners to come to the US and create value. PG is right that we should be attracting these people instead of throwing random obstacles in their way.

-- American-born son of an immigrant Indian scientist

tokenadult2• 17 years ago

After edit: On second reading of your article, this differs from the existing investor visa category

http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f...

in asking the would-be immigrant to put up talent rather than money as the sign he will run a successful business. That's in line with your usual take on how easy it is to start up new businesses in today's economy.

It's an intriguing idea to broaden the talent pool available for seed-stage investors to invest in. The political objections will revolve around

a) What happens to the people who start up but flame out, failing in their businesses? It's expensive to deport people who have already arrived, and they sometimes disappear from the view of law enforcement.

b) Why shouldn't the United States start-up investment market be preferentially granted to persons who have legal right to work in the United States? (My bias is toward free movement of people across borders, but the only reason immigration law exists at all is that not everyone shares my bias, not in any country.)

P.S. I am a lawyer, and used to practice immigration law, although the bulk of the cases I worked on involved different visa categories.

tomsaffell2• 17 years ago

Nice idea. Feels like a version of the E-2, brought in line with the new realities of the cost of starting a web based business - http://en.wikipedia.org/wiki/E2_visa (government is always slow). Rather than requiring applicants to bring monetary capital into the country, they'd be required to bring start-up capital, as measured by those who will invest in it.

jerryji• 17 years ago

My E-2 interview (at the US embassy in Singapore) is scheduled at the end of this month.

Cost me more than $6K (in attorney fee, etc) and countless number of hours to prepare all the documents without any guarantee that I'll get it.

It _is_ more scary than applying to YC, now good luck to myself.

sriramk2• 17 years ago

The problem with both the E1 and E2 is also the list of 'treaty nations' you need to be a member of. For example, India is not on the list

c3• 17 years ago

I actually am in the US on an E2 visa, and I founded and (still) run entp.com. In my mind, the investment requirement of the E2 merely is a way of your providing proof of your ability to achieve success.

arram• 17 years ago

Anyone who missed it should check out the etherpad link: http://etherpad.com/ep/pad/slider/foundervisa

Very cool.

quizbiz• 17 years ago

Is that still a feature made available only to PG?

staunch2• 17 years ago

The accreditation struggle was tough! Now I want a list of every investors Ronco number.

kapitti• 17 years ago

Painful to watch how long the 'four' went unedited to '4'.

delackner• 17 years ago

That was amazing, a window into the thought process. Knowing that the whole bit about Erdos numbers doesn't appear in the final text I was fascinated watching the process of its evolution into the final completely different idea.

gord• 17 years ago

A link to a PETITION where one can register support, might give this some political traction.

I think pg+hn+/. etc could generate 50k signatures.

ideas?

tom_rath• 17 years ago

An e-petition will do diddly. Write your senator, congressman and governor on paper, sign the documents and mail them.

Paper letters are the currency of elected representatives, and a stack of 10k letters descending on numerous offices would do infinitely more than a lonely web page with 50k e-mail addresses.

jgilliam• 17 years ago

You can support it at White House 2.

http://whitehouse2.org/priorities/1948-visas-for-startup-fou...

sfg• 17 years ago

One danger is that the accreditation process for recognised investors could be hijacked and used to give special privileges to a small number of firms.

wheels• 17 years ago

That's simple. You just make the accredidation based on the number and size of US investments and you allow some small portion of those to be of this special class.

gojomo2• 17 years ago

By definition these 10,000 founders wouldn't be taking jobs from Americans

"But, but, but: their companies will compete with and disrupt established American businesses, destroying American jobs! Why, a 4-foreigner web news or classified startup could put dozens of (unionized, citizen, voter) newspaper employees out of work!"

Of course I don't believe this is true, nor would it even be a good reason to restrict entry if it were true. (Better to have the new disruptive companies here, than elsewhere.) But that's the sort of deranged logic used against broader immigration. The neat trick of limiting the visas to those starting companies will only help a little against anti-immigrant emotions.

They wouldn't all grow as big as Google, but out of 2500 some would come close.

I suspect close-to-Google-scale successes come more like 1-in-100,000-tries than 1-in-2500. There's a tendency to see every startup as a potential little Google -- we could call this 'Google Goggles'. But Google is one-of-a-kind, and it shouldn't require even one success of that scale to make the case for broader immigration.

For example, shouldn't these visas be available to immigrants whose 'startup' is a donut shop, nail salon, or bodega?

(I also suspect such a program could be easily gamed... but as I'd like to see more immigration of anyone ambitious, I suppose that's a feature not a bug.)

gojomo2• 17 years ago

Implementation questions:

Do the investors have to be Americans, or is it enough that the investment is spent in the U.S.?

When the money runs out or the startup fails, are the founders asked to leave?

colins_pride• 17 years ago

I'm just happy to see the karma going where it belongs. I "found" these essays three days before my first trip to Bombay, and read all of them on the 14 hour nonstop. I showed up only slightly tired from the travel, but extremely optimistic on the world, the future, and myself. And that made a difference in convincing my now in-laws that I was a worthy son-in-law, deserving of their daughter, the most wonderful woman I know.

Thanks, Paul, for another excellent essay.

jbenz• 17 years ago

Hear, hear. I couldn't agree more. I have a foreign-born friend who has inspired similar thoughts in me. I'm convinced this friend could found an incredible web startup here in the States if only the Federal Government wasn't making it so difficult for him.

I wrote to my congressman expressing this sentiment. He replied saying in a nutshell: "Don't worry, I strongly support protecting American jobs from foreign encroachment."

I wrote back to say that this was nearly the complete opposite of my concern, and I asked him to respond with an indication that my original email was not misunderstood. Of course I never heard back.

atobe• 17 years ago

I wonder, how could one turn this idea into a lobbying effort? Who else realises the benefit of it and would support it? Whom should be contacted and what representation should be made?

I think it's a great idea, btw.

Of all people BillG has actually been before congress and represented on this issue. He had said that Microsoft had often been naive with regard to the contact needed in Washington to get things changed.

Modernising this idea, how about Eric Schmidt?

ozchrisb• 17 years ago

Just use an E-1 and educate US investors that if they invest in overseas company X then they can get E-1 status.

abii• 17 years ago

E-1 is restricted to nationals of a small set of countries. It needs to be more open.

IndianJazz3• 17 years ago

Dude , some of those countries in the list is a joke !

erlanger3• 17 years ago

Sorry, but I don't think that this makes much sense. INS already has their hands full, and it wouldn't be much fun for them to have to check up on thousands of startup founders to be sure that they're in fact running their business (1) viably, and (2) according to their agreed business plan.

The system would be unbelievably easy to cheat. It also would be stupid easy to turn a "startup" into a money laundering scheme.

Don't take this the wrong way: I really wish that there were an easy way to let legit founders into the US. But it just isn't practical.

andreyf4• 17 years ago

Wow, who up-votes this junk?

Let's see:

The INS has their hands full...

PG said: 10,000 people is a drop in the bucket by immigration standards

For comparison, there were 591,050 student and exchange visas granted in 2007 [1]. If the INS can handle checking up on individual students following educations via Universities, they can do the same with 1/200th the number of startups via investment firms.

The system would be unbelievably easy to cheat

Oh, how? And why is accreditation a viable solution for Universities, but not investors?

I really wish... but it just isn't practical

Give one shred of evidence aside from senseless pontification and I might consider it.

1. http://www.studyusa.com/English/articles/visa2.asp

erlanger3• 17 years ago

"PG said: 10,000 people is a drop in the bucket by immigration standards"

Yes, in terms of people. But you fail to understand that it's an entire new process and system that would have to be invented and executed.

You just don't think like a con-man. Universities have quite a bit on the line, such as accreditation. A private company has next to nothing on the line. Anyway, here's how I'd do it:

1. First off, I'd need to know somebody in the US who has a viable business and would vouch for me. Because immigrant communities support business focused on their interests, this wouldn't be very difficult. Of course they'd agree, because of the benefits for the home country (sending money home, etc.).

2. Have them offer fake investments to me and a pool of founders. Get approved by INS/State.

3. Once in the US, work as I please. Funnel this money back into the "startup" as profits. Plenty of startups can't even turn a profit, so financials wouldn't have to be impressive.

4. Rinse, repeat. The same business would only get approved so many times, but there are tons of businesses here.

Now, for the unscrupulous way (since there's nothing particularly immoral about the previous scenario). Note that I'm for the legalization of drugs, but that's not the point: The US gov't is sure as hell against that.

1. Have associate(s) in the US prop up a shell of a business that appears to be legitimate. Have them offer a huge investment for what appears to be a startup's credible business plan.

2. Move in under an alias with fake documents.

3. Funnel drug money through the "startup," which would be an ideal money laundering node. Because the plan is intended to produce successful businesses, nobody would blink an eye at the eye-popping profits. Just bullshit as much as necessary...if YouTube cooked the books, they could convince people that they were turning $150M profit annually easily. Show your cards as you please, since you're holding the deck.

4. If things get even remotely hot, leave the country. So much money's been successfully processed at this point that it's undoubtedly a net win. Hell, say you're flying to Lima to make a commencement speech on business. Nobody would stop you. The associates could claim ignorance obviously, as you were just some entrepreneur they put their hopes and dollars in. Even if the startup were irrevocably linked to money laundering, you're back home and extradition isn't happening, since you used a false identity.

5. Rinse, repeat with other associates.

"Give one shred of evidence aside from senseless pontification and I might consider it."

Evidence on a virgin immigration plan? I'm sure there's plenty out there!

Let's flip this: Tell me how you prevent either of the two previous scenarious, short of having the gov't handle the entire recommendation/approval process, which would pretty much defeat the purpose.

Sigh ... people are so naive.

fauigerzigerk3• 17 years ago

It's a matter of cost versus benefit, right? If the US is able to attract successful startups the additional cost will be more than made up for in additional taxes.

Second, pg's proposal seems to be a more targeted version the of E-1/2 visa with the additional benefit of shifting some of the administrative burden onto the shoulders of investors. So it's probably less work for the INS than the existing E-1/2 process.

Sounds like a pretty good deal for the US tax payer.

hillel• 17 years ago

Neat idea except for the part about using investors to validate which startup counts. What about the plenty of viable and compelling startups that have decided to bootstrap?

gruseom• 17 years ago

It seems like this might be more viable politically than most attempts at immigration reform in the US because it neutralizes (if not reverses) the "they're taking our jobs" objection. The objection could hardly become "they're starting our businesses".

On the other hand, it's hard to underestimate the irrationality surrounding this issue.

Edit: What meaningful changes could the Obama administration make without having to go through Congress?

siegler• 17 years ago

I usually avoid politics, but since we now seem to have an administration that's open to suggestions, I'm going to risk making one

If your goal is to persuade as many people as possible, insulting the previous administration and by extension those that voted for Bush is a bad start. I was already opposed to your idea before the second sentence, despite the fact that I'm an advocate of increased legal immigration.

mhb2• 17 years ago

I thought the risk was in opening the floodgates of pure political discussion on HN.

anatoli• 17 years ago

You seem to have found a lot of implied meaning in that one sentence. You also have an extremely low treshold for what you consider an insult.

abossy• 17 years ago

I believe the reference is to all administrations prior to the current one. Transparency has been a hallmark of the current administration since day one.

geebee2• 17 years ago

I'm always curious when people say they advocate increasing immigration. Right now, the United States takes about 1.2 million immigrants legally into the country every year. Does this seem too low a number to you? If so, do you see a practical need for some kind of limit, or are you in favor of limitless immigration?

TJensen2• 17 years ago

The problem is that the majority of illegal immigrants are at the low end of the tax spectrum, often taking more out than the put in. The people who we'd ideally want in the country are at the other end, and they usually aren't here illegally. That is the group PG is trying to target here, and I'm ALL for making it easier for them to immigrate.

chops• 17 years ago

The tricky part might seem to be how one defined a startup. But that could be solved quite easily: let the market decide.

As much as I support your position (I'm an open immigration advocate), the concept of "Let the market decide" isn't exactly a position I hear the government ever clamoring to support. The government wants control, and giving up control is it's antithesis.

mohamedsa• 17 years ago

As a non-American who applied to YC twice the article was a pleasant surprise. However I'm not sure America is as attractive to non-American founders as some people think. I'll explain (my arguments are mostly personal perceptions...I have no practical evidence yet on any of this since my own startup is still at the "wrote some code" stage).

Let's suppose there are 2 types of founders: people who have enough money & connections, and the young "live on Ramen noodles" type founders.

For the "money & connections" type, a lot of foreign countries offer cheap but still qualified programmers and don't put too many obstacles on founding companies so if your country is like that it might make sense to stay. For the "Ramen" type, many of them may not afford America's often high living costs.

As for the argument that the US provides a better/more free market... even this is changing: The internet probably allows relatively easy selling to worldwide customers from any country.

All that said, the American dream probably still lives on and many people would likely provide counter-examples to my limited point of view. Of course pg didn't claim that coming to the US is a no-brainer for every single talented hacker. There are probably enough of those who are interested to satisfy the 10,000 founder/year goal.

jey2• 17 years ago

"For the "Ramen" type, many of them may not afford America's often high living costs."

I think the algorithm PG proposes is something like this:

1. Produce enough that you would be able to convince someone to fund you. Maybe this takes a prototype, a convincing sales pitch, ramen profitability, etc.

2. Convince someone to [seed] fund you.

3. Move to a place with an environment favorable to startups.

4. Continue working on your product, now with access to investors, other founders, good employees, great weather, ...

The idea is to get to step 4 as fast as possible. In most parts of the world you'd never be able to find good investors or a startup-supporting culture, and that counts for lot. As PG has pointed out, there's a huge variance in startup-friendliness even amongst the major cities in the US.

bokonist6• 17 years ago

How would the government decide who's a startup investor? The same way they decide what counts as a university for student visas. We'll establish our own accreditation procedure.

This part scares me. Accreditation boards are a bug, not a feature. Perhaps, like pg's idea, they started out as well intentioned. But today, their primary purpose is to erect arbitrary barriers of entries, thus propping of the salaries of professionals and the tuition of the schools. The tech industry is great because it is so isolated from politics and bureaucracy. I'd hate for that to change.

pg11• 17 years ago

That is a worry. It would have to be super transparent. Originally I proposed a straightforward algorithm for deciding: to use Erdos numbers with Ron Conway as the seed. I took this out because I thought it was better not to go into this level of detail in the essay, but I'd advocate using something like this to decide who was a startup investor.

indiejade• 17 years ago

By definition these 10,000 founders wouldn't be taking jobs from Americans: it could be part of the terms of the visa that they couldn't work for existing companies,

This is a good idea because the expected outcome of adding 10,000 new people to the "pool of workers" by existing companies would be to see an increase in unemployment claims (even though not all unemployed people would file).

So by adding 10,000 Founder Visas to the pool of workers and then tracking the rate of decrease (or increase) of unemployment, a metric of immigrant-based job-creation startup foo could probably be determined.

bradgessler• 17 years ago

Sooner or later super transparency would turn into super opaque.

bokonist6• 17 years ago

The point is you don't get to control the algorithm. When I interned in the Massachusetts State House, I sat through a meeting discussing the algorithm that decides how much state money each local school district receives. Now I'm sure you or I could come up with a quite elegant algorithm. But the actual algorithm was a complex beast that no staffer at the meeting could begin to understand. It was the evolved product of years of power struggles.

In politics, the organized faction always trumps the general interest. Say Faction A is 1% of the population. The faction wants to preserve a barrier to entry that costs every voter $100 and nets each faction member $10,000. The members of Faction A will be single issue voters over the barrier to entry. But to the rest of the public, the issue is lost in the noise. Average Joe does not even realize how much the barrier to entry costs him, because no interest group will fund ads to tell him. Thus the politician always supports the faction in order to prevent the 2% swing. ( I've spent time in both the state house and Congress, and this is exactly how the decision making process works).

The life cycle of any government policy ends up being the following: 1) Program is created to benefit the public good 2) The program inevitably directly benefits a small group - employees of the agency, contractors, etc. 3) The beneficiaries become dependent on the program. They organize in order to protect themselves politically. 4) In any policy battle where the interests of the beneficiaries collide with the public interest, the beneficiaries generally win. 5) As the beneficiaries win battles over time, the program ends up serving the beneficiaries at the expense of the public.

This is basically the life cycle of every program that has ever come out of Washington. The once mighty NASA now only exists to provide employment to NASA engineers. The school system exists mainly to provide employment to teachers. The AMA exists to erect barrier to entries to the medical profession. Etc, etc.

Your algorithm proposal is amusing because it is basically the same solution to the problem of corruption/factions that the progressives tried during the 20th century. The idea was that "scientific policy" based on algorithms and formulas, designed by academics and civil servants, could replace control by politicians. Needless to say, it was a miserable failure. A classic example of policy via algorithm is the creation of Nationally Recognized Statistical Rating Organization's who used algorithms to dictate which loans regulated funds were allowed to invest in. It did not take too long for Wall St. to figure out a way to structure the riskiest loans imaginable in ways that would pass through the algorithm. The rating agencies are a high profile example, but there are hundreds of other similar failures. In practice "scientific public policy" ends up being the worst of both worlds. It combines the downsides of algorithms (lack of intervening personal judgment when the algorithm gets gamed) with the downsides of politics (corruption/factional power struggles).

psranga3• 17 years ago

You rank applicants to the visa program by Erdos numbers? Is this the same Erdos number as http://en.wikipedia.org/wiki/Erd%C5%91s_number? Or do you rank investors?

In either case, you're ranking people based on WHO they know, not what they know. Worst kind of ranking possible (it keeps competent outsiders out).

Raplh• 17 years ago

Rather than ranking the proposal against some version of protection, I evaluate it in terms of: would more good stuff happen with the proposal than without it?

Clearly it would. Clearly having SOME additional number of people admitted who are at least doing SOME version of a startup would be a positive step.

The number of things that have to go wrong to make this proposal a net negative are unrealistically perverse and pessimisitc. If EVERY policy proposal is held to a standard of "we will only do this if there is NO CONCIEVABLE WAY of ever making it be bad," then no policy proposals would ever be implemented.

Think of it like a business. It is better to do something that is approximately right in a non-optimal fashion then it is to do nothing until you are exactly right or, as the poet says, to optimize too early.

mhb2• 17 years ago

This idea is a special case of Gary Becker's proposal to sell the right to immigrate (http://www.becker-posner-blog.com/archives/2005/02/sell_the_...). In this special case, the investors in the immigrant's business would pay the immigration fee.

I don't see why the potential benefit to the US of immigrants with startup ideas is necessarily greater than immigrants of similar technical skills with no stated intention to start a company. But the immigration fee could help in sorting that out.

fauigerzigerk3• 17 years ago

So the first thing all immigrants learn is that you're taxed for absolutely nothing in return. Paying a tax to be allowed to pay taxes. Thank you very much :)

grinich• 17 years ago

I like how you used Etherpad. Watching the essay unfold gave me even more insight into your thoughts on the issue. ie: what topics took a while to iron-out and how you formulated your sentences.

I'd like to see a few more of these in Etherpad.

rokhayakebe• 17 years ago

You Nailed It PG(an immigrant living in the US). Simple as that. Nailed it.

car• 17 years ago

A visa type that is quite similar to what you propose does exist. It's the E-2 "entrepreneur" or "Treaty Investor" visa (http://travel.state.gov/visa/temp/types/types_1273.html).

I've gone through the process, and despite it being a lot of paperwork and requiring the help of a lawyer, it was ultimately a good experience.

In order to get such a visa, one has to submit a business plan, and show sufficient funds from abroad. Interestingly, the funds only have to be appropriate for the business to be started, there is no set minimum like a lot of people assume (e.g. 100k). An example my lawyer gave me was a woman that wanted to start a horse riding school, and who got her E-2 by proving an investment of ~30k into her company.

I started an internet business, and my investment was in the same ballpark.

Also, for founders already living in the US, it is ok to work on setting up the business, e.g. incorporating etc, while applying for the E-2, as long as no customers are being engaged and money is being earned.

A downside is, that there is no straight path from the E-2 to a greencard; other then upping the investment (which has to come from abroad) to $10^6.

Edit: There is another downside, mentioned elsewhere in this thread. One has to be from a 'treaty' nation.

Disclaimer: I'd strongly advise you to consult an immigration lawyer if you want to do this.

catz5• 17 years ago

There is a simple alternative – remove the stupid restrictions on H1B visas. The restriction that if you loose/quit your job that you have to be out of the country in 60 days is bad for three reasons.

The first reason is that the employer knows his worker is dependent on him – he can thus get away with a lower salary, etc... The second reason it is bad is that you cannot quit and start a start-up – if you do not have a sponsoring company you must be out of the country in 60 days.

The third reason is that it deters people from going to the USA. I really want to go to California next year – but with that Visa system it is not going to happen (probably going to London). Compare the US system and the UK's General Highly skilled Visas (e.g. http://www.workpermit.com/uk/uk-immigration-tier-system/tier...) – it is really no fuss and valid for a time period.

There are already more than 5 million Mexicans in the US. Would 1 million engineers and scientists really be a bad thing?

andreyf4• 17 years ago

This might be a strictly American "politically correct" interpretation, but I think your last sentence assumes that being Mexican and being an engineer is exclusive, which it obviously isn't.

catz5• 17 years ago

> but I think your last sentence assumes that being Mexican and being an engineer is exclusive, which it obviously isn't.

No it doesn't. I am sure that there are Mexicans from the whole spectrum of the population (doctors, engineers, manual labourers, etc...).

With highly skilled visas you can assure that you only get immigrants from a certain section of the population (Engineers).

iamelgringo2• 17 years ago

Downvote for the "Mexicans" reference. Perhaps saying, "There are over 11 million undocumented immigrants in this country. Would 1 million engineers and scientists be a bad thing?"

And, 1 million engineers and scientists would depress salaries in the US. That's a plus for founders, but a minus for engineers and scientists trying to find work.

I'm almost always on the side of greater immigration into this country, but I can see the downside of it as well.

catz5• 17 years ago

> Downvote for the "Mexicans" reference. Perhaps saying, "There are over 11 million undocumented immigrants in this country. Would 1 million engineers and scientists be a bad thing?"

Saying there are over 5 million Mexicans in the USA is a completely factual statement. It is true that you have much higher immigration (both legal and illegal) from neighbouring countries than parts of the rest of the world.

> And, 1 million engineers and scientists would depress salaries in the US.

Maybe. But either companies move to where the engineers are (outsourcing, new companies) or the engineers move to where the companies are. In the latter case they still pay tax for the US.

And American engineers will have a depressed salary in any case.

endtime3• 17 years ago

How are H1B visas an alternative? I don't see any reason to believe that if H1Bs were less restrictive then we'd see H1B holders leaving their jobs to create startups. You obviously have personal feelings about the H1B, and I'm neither agreeing nor disagreeing with you, but it really has nothing to do with the idea of a founder's visa.

Comments of the form "the article is loosely related to one of my pet issues, so I'm going to say my schpiel" are not interesting.

For what it's worth, I think the founder's visa is a great idea. I know this sounds corny, but it's an extremely American (entrepreneurial, meritocratic) idea.

catz5• 17 years ago

> How are H1B visas an alternative? I don't see any reason to believe that if H1Bs were less restrictive then we'd see H1B holders leaving their jobs to create start-ups.

A lot of people start startups while they are working. This simply makes sense, because getting capital for a start-up is fairly difficult.

A lot of people also try a startup and if it fails, re-enter the job market (after 6 months for example) and start again when they get a new idea.

A general visa that would allow a person to move from employment to starting his own company back to employment would be much more useful than just allowing people to either work or only have a founder's visa.

Also, how many start-ups where founded when a group of employees broke away from an employer and started their own thing? Neither a founders visa or H1B would make provision for such a situation.

> Comments of the form "the article is loosely related to one of my pet issues, so I'm going to say my schpiel" are not interesting.

That may be true. But I see little use in commenting on something that is not relation to any issue that I am interested in. If the comment is out of line then that is what the moderation is for (either flag it or downmod it then).

mooted• 17 years ago

On the other hand, if the restrictions doesnt exists: (1),(2)Employees can quit anytime for a better paid offer , effectively nullifying the value of efforts and investments the original employer made on the individual. (3)Huge inflow of foreigners will hurt US citizens.

If a foreigner is ready to accept a job with a company offering him a lower salary,it depicts that just he want to get into US somehow.

jibiki• 17 years ago

> Employees can quit anytime for a better paid offer , effectively nullifying the value of efforts and investments the original employer made on the individual.

I don't get your point, are you saying this is a bad thing?

IndianJazz3• 17 years ago

I agree - Infact this is THE biggest reason , stopping me to break free and launch my ideas.

If "I" were to start a firm , all that matters is talent, I would cherish to work with fellow American workers. Remember in the modern age , the more varied my fellow workers are , the richer is my experience. Each one of us has an amazing story to tell, along with the rich experiences from our varied backgrounds.

I do understand the worries about the American workers right. Its genuine, and I respect it.

IndianJazz3• 17 years ago

Here is how the US can go about it,

1. All visa applications must have a "CERTIFIED" viable buisness plan.

2. Sensible cash amounts should be with the applicant along with the good credit standings - Its foolish to ask for 100K if you are starting a Web2.0 business.

3. Periodic progress reports to be submitted , certified by auditors.

4. Initially for 2 yr , and then renewable depending on numerous factors like success etc

kalendae• 17 years ago

What about the opposite question. Do startups need to be in the US to be successful? And if so why? I'm sure there are non-US originated webapps that are popular in the US, but it seems the opposite tends to happen more often (Google, Facebook, etc etc...). Given that you can host your web app on EC2 from anywhere in the world with an internet connection as easily as from the US, what then are the barriers? My guess is that it is actually mostly cultural. If I write a webapp I am more comfortable knowing the target audience well. If it is a cultural barrier, then maybe the foreign founders don't really gain much from being in the US unless they are here to absorb the culture?

jhancock• 17 years ago

Its a fine plan. If I were your congressman, I would support the bill ;).

But if you think the U.S. is already tapped out of top entrepreneurs, your not looking hard enough.

What would the costs be to enable those already in America? Things like school loan deferment and establishing incubation investment vehicles in at least 10 other cities could enable at least 10,000 Americans. Sure that costs something. But if you think it would be cheap to oversee a special program for 10,000 "entrepreneur visas" a year, then you haven't spent much time at immigration offices ;).

resdirector• 17 years ago

Currently, how difficult is it to get overseas founders into existing startup programs such as YC, TechStars etc? Is YC, for instance, turning down foreign applicants due to visa restrictions? If not, I don't see a problem.

danbmil99• 17 years ago

Is there really a lack of people in the USA today who want to start companies? It might be a zero-sum game -- X dollars available for startups; if you let in a bunch of people, the startup dollars will go there rather than to people already here.

TJensen2• 17 years ago

But that is where the beauty of having the market decide comes in. If a person from India but founding a company in the US has a better idea, then the money SHOULD go to her. That is best for the investors, and it is best for America, because a better idea will build a better company that will create more jobs.

fauigerzigerk3• 17 years ago

The zero-sum-game fallacy is at the heart of every single immigration debate I have ever followed. The size of X depends primarily on expected returns. That's how investing works. So if you assume that X is constant for any particular country, you're implying that returns are independent of how many good founders are available. I think that's not a reasonable assumption to make.

jules• 17 years ago

So if you don't need VC money you don't get in?

stuntprogrammer• 17 years ago

This is a serious hole in the proposal. If you have enough resources to not need to take investment for your startup (and want to minimize outside early stage money), but not enough for an EB-5 investor visa, then you're excluded. I know several people who fall into that gap; you'd think the US government would be happy to take immigrants with say at least 500k$ to support themselves but nope..

hs• 17 years ago

immigrants who make it big in internet seem to be from young kids who gain permanent residency later

are there any greencard holders having thru h1b (6 years?) and then found startup and be as successful?

rys• 17 years ago

I've not had a really detailed read of all the comments, so apologies if I missed it somewhere, but how do you justify it as "a policy that would cost nothing"? Or am I confusing monetary cost with something else?

The rest of the idea seems sane, though, as long as the application for the visa made it clear what the intention was, on top of "I want to found a company or companies please".

Non-US resident here, for what it's worth.

albertcardona• 17 years ago

What I find fascinating of the idea is the multiple win-win:

1) The USA benefits: more companies that pay taxes and pay for services, and create jobs for americans.

2) The founders benefit: they get a chance to bring their ideas to fruition, and get rich.

3) Paul Graham benefits: improved competition in the startup world would bring better founder teams to Y-Combinator.

4) The general public benefits: good ideas get implemented and are available as services that improve, in some way, your life.

Aegean• 17 years ago

I think the Founders Visa idea totally reflects the American freedom spirit and it must be definitely tried.

I am currently holding a Highly Skilled Migrant Visa from the UK, and this was the only way I could start a startup there. After the visa was available, I quit my job and started my own business. I think with this visa, UK already went ahead of U.S. in this respect.

I agree that in order to reduce competition with American citizens, the Founders Visa may be limited to working in your own company. Founders don't want to be employed (I strictly don't - even was gonna refuse Google if they made an offer) and new companies create job openings. A Visa of this kind would be totally adequate for someone like me.

I didn't like the "Let investors choose" criteria. What if I am self-funded? If I bring my funds in, isn't that even better? Also it is highly subjective whether a founder is going to be successful or not. I think the election strategy should be based on founder's age, education, past earnings, work experience etc. just like in the UK scheme: http://www.workpermit.com/uk/hsmp_calculator.htm

Yes this is not the best criteria to select successful founders, but at least it is a "secure" criteria, i.e. you choose people elite enough that they won't hurt U.S economy. You could start with a "science/business graduate founders" scheme, and extend it based on success.

My last words go to Europe. Europe is living in the past. I wanted to attend FOSDEM in Belgium, was requested so many difficult documentation for Visa, that I decided not to go. I will probably never go to Belgium or similar countries, not because I hate them, but because its simply not worth the effort to visit those countries.

DomesticMouse• 17 years ago

PG's post is interesting, as always. The bit that is worrying me is the linked Etherpad animation. Am I the only one that looks at the Etherpad DVCS using javascript functions as the delta data format, and think XSS sploit in waiting?

phugoid• 17 years ago

With all due respect, this seems pretty naive to me.

I've met dozens of people trying to gain entry to Canada and the US, and it's common knowledge that you can game the system with money. This would just provide another entry point.

You would have to define what is a successful startup, in simple legal terms, and people would find ways to satisfy the definition and stay in the country.

I have experienced first-hand the difficulty of moving to a new country, adapting to a new system, trying to build a new social network. Any genuine startup founders would have to contend with all this, all the while knowing that if their business fails they're booted out of the country.

Anyway, I believe the reason entrepreneurship works so well in the US is because we allow people to fail.

nandemo• 17 years ago

Not very likely to happen.

To put things in perspective: most (non-European) foreign nationals are required to hold a transit visa just to make a connection via an US airport. To obtain that visa you need to go the local US consulate and schedule an interview. Not for study or tourism, mind you. Just to step off a plane and board another 2 hours later.

csomar• 17 years ago

agree I'm facing the same problem. I can't get VISA to USA or Europe and thus start a startup there.

Many people are facing the same problem

veteran4• 17 years ago

Is it incidental that except for one or two guys in essay review are all people who are small investors who don't have ability to open investment shop in India/China?..

May be 20 yrs back this was relevant but today just because you offer does not mean quality people need it..so before proposing was there actually needs analysis..did somebody read the Chinese social networks are ahead in revenue numbers and there is huge investment in electric cars..same story with other emerging markets and don't think there are no investment funds there..obviously, people will say there is not enough support but in Silicon valley also beyond seed stage very few outsiders get the funding..checkout thefunded.com for more information..so if you are smart/hard working then stay where you are because you can create opportunities..also worthwhile to read mercury news story about dwindling public companies in silicon valley.. the other part of the story is not there but you can very well guess.. world is flat!

Btw, I have 2 investments in Indian companies and I would not advise them coming to US unless they establish themselves well..simply because starting and growing a company is not easy if you do not have well established connections and good market read..hiring good people also needs good connections..most of the time your early employees are your friends or past coworkers.. This kind of arrangement will work only if the people are going to hand over reins to someone local ..this is exactly and only suitable for mass investors like Ron Conway/YCombinator..and I don't want to say anything on this forum but entrepreneurs while choosing the investor need to see lot more than initial recognition.. I know many people will oppose me here but just walk through a case scenario where this will work..also if you are going to throw in Google example then please do thorough analysis.. My advice to young entrepreneur is just go in the market where you understand things not that looks shiny.. there are no overnight successes..and don't quit something you have (can have) simply on the word of an investor..definitely not for the people who can not be with you till you get cash flow positive..(just to be clear I am not taking swipe at either Ron or YCombinator program..i am just talking in context of extending (and "assuming") its relevance to international teams without really understanding the other side)

veteran4• 17 years ago

Another quick clarification - I am not saying the list has "small investors" in the sense they have less personal fortunes or these are small/less influential people..and also they don't have ability is wrong phrase..actually, my point is these and all other folks should also think of they crossing the boundaries themselves and help America tap the enormous resources in a truly global society

pg11• 17 years ago

I don't understand what you're saying. Are you saying that would-be founders should stay in their home countries and start their startups there?

If so, then the answer is that it depends on the country and the nature of the startup. There are certainly some combinations of country/startup where the founders would be better off in Silicon Valley. It's up to the individual founders to decide if theirs is.

veteran4• 17 years ago

uh..hard point to understand (or swallow?).

I don't believe in this assumption -- "There are certainly some combination of country/startup where the founders would be better off in Silicon Valley - when we are talking about founders who need visas (they can't get EB5 green card which is given based on investment or business visas which are pretty much given to anyone who has valid established business or who are not already in US as a student/employee..in that case founders do get H1B easily transferred for their own company provided they can show company of substance..if they pursued advanced degree here then they don't get in H1B cap)..so limits to be the people without much of resources of their own - who don't understand market here (at least not on first hand basis) and don't have connections..how will they succeed.. why misguide some of them and also fool ourselves that such a thing is useful..especially, given there is much better chance if they stay where they are then they will be able to pull off something successful targeted at the market they already understand

and that too putting up number of 2500 such startups every year ..good idea to write 2 examples to validate it first..tell me some story..

so my point..people should start company where they understand the market and if US wants to benefit from international resources then investors should go outside US because only that will work..because that is right for startups/founders/investors..

aita• 17 years ago

Why should people(bright) all around the world come and help america? Why are proposing an idea to lure these bright people? Has america lost its confidence? In this digital age, whole world is like home. Why again think of country ? why not "Vasudhaiva Kutumbakam"?

plinkplonk• 17 years ago

" why not "Vasudhaiva Kutumbakam"? "

For those who don't know Sanskrit

"Vasudhaiva Kutumbakam" == (roughly) "(Every one in) The world is my family"

I wish people wouldn't drop into non english languages without providing a translation. If someone were to sprinkle his messages with Swahili (for example) I would be lost.

psranga3• 17 years ago

A quick search shows no mention of Illusions of Entrepreurship. Excellent book, btw.

That book claims that existing companies create more jobs than new companies. Starts at page 153: Here's the google books link: http://bit.ly/m4vXV

psranga3• 17 years ago

Others have said it, but I'll say it again.

Maybe in 1989, this would have made sense. But capitalism has had enough converts that most countries have pretty low barriers to high tech startups now.

IMHO, people who are already entreprenurial in their home countries will be the last people who will want to immigrate to the US. Maybe pg looks at the number of companies founded by immigrants and thinks that he can increase that number by creating a new visa class for founders. Immigrants start businesses because American culture is much more stable, open to startups, tolerant of failure, and gives people second chances; so many immigrants let go of their previous cultural biases and become founders.

If you're already an entrepreneur in a poorer country like India and China, why would you immigrate from there to a country where all expenses are vastly higher. I mean, American companies are setting up development centers in India and China. For richer countries like France and Germany, you give you any existing networks and go to a new place. Seems like a net loss to me.

You have stay in a culture for a while before you recognize business opportunities there. I bet that most of the immigrants who start things do so after staying in the US for 3+ years. My claim is that a new immigrant will do worse at business than average.

You'll have to let in lots of smart people and hope that some start companies. Maybe you can set up the rules so that it's easier for the smart new arrivals to start a business as soon as they're ready.

Currently, due to various rules, the most common route to permanent residency takes approx 6 years of continuous employment with the same employer for an immigrant to gain unrestricted rights to do business (this requires permanent residency). So for somebody who arrived for a Master's degree (being simplistic and using Master's as a proxy for smartness), it will be 8 years after arrival. This same person may have understood the culture well enough in 3 years and be ready to start a business.

nickpp• 17 years ago

A VISA?! Are you f..ing kidding me? Do you know what a fragile status one has while on a VISA? Any day you your visa can be revoked and you can be thrown out.

Do you expect me to risk everything, to pour my life and blood into a business while under the stress that if anything goes wrong I am on a plane with a one-way ticket to a place where I have nothing anymore, together with my family and away for any of my friends?

Do you want founders? Do you want INVESTORS? Anything less than a Green Card is a spit in the face. Take an example from Canada or UK who both offer directly residency under a set of qualification rules, not $1m.

Stop treating us as we're nothing more than students happy to receive a couple dozen k as if that was an actual serious investment. Oh wait...

shiro3• 17 years ago

I've worked on visa for several years, so I know it's like putting your life at the mercy of USCIS. I got enough stress until I got a GC. But there are already people who are willing to risk that, so it is one step forward for those people and for US economy. And it is where pg stands, so at least it's consistent; you shouldn't be surprised.

Of course there are different views. For other countries who wants to compete Silicon Valley, it is bad. For those who concern rights of visa workers, more visas may only make problems worse. You can stands there and discuss those disadvantages logically, but you don't need to burst emotional responses---it won't help changing opinions of the other side.

BTW, I think this visa plan is only an initial step and clear path to a Green Card should be shown as the next step. After September 2001, it seems that employment-based Green Card processing is taking longer and longer. Some of my friends are waiting 5-6 years already. There's not much point if those who has built successful business have to stay on non-immigrant visa status.

david927• 17 years ago

The change has to come to take the money and investment out to where it's happening. Innovation is spreading everywhere, yet investment is local, which means North America and (parts of) Europe. And this isn't necessary anymore. The trick isn't to find a way to bring the people to the money, it's a way to bring the money to the people. Most founders will do anything for their startup, but even then, asking someone to move countries is a big request. Americans often think that people would cut off their arm for a US passport; it's simply not true. My opinion is that more of the hard problems are being worked on outside the US than in it, and that means that this investment migration is inevitable.

BerislavLopac• 17 years ago

The main problem here is that there is no need for founders to move to the USA to get funded by the US investors.

How would such a visa benefit foreign investors? If there is a shortage of good entrepreneurs in the States, wouldn't it be easier if the VC's start fishing around the world instead of waiting for all the fish to come to their own pond?

Y Combinator should take a hint from their UK/European counterpart, Seedcamp. Starting in London two years ago with a similar model as YC has in the US, they have started organizing local mini-Seedcamps throughout Europe to make it easier for the startups to apply: the first mini-Seedcamp was last year in Kiev, Ukraine, while this year they have a tour of seven cities -- Tel Aviv, Paris, Warsaw, London, Helsingborg, Ljubljana and Berlin; check www.seedcamp.com -- where local startups may apply towards the main event in London later this year.

joeythibault• 17 years ago

It's called Eb5 http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f...

The Founder Visa

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