Most venture capitalists can recount examples of immigrant entrepreneurs who have built great companies that delivered jobs and outstanding products and services to the American public.
Those same VCs can also recount examples of immigrant entrepreneurs who have been distracted, frustrated, and burdened by our antiquated immigration system that prevents foreign-born entrepreneurs from staying in the country to build their companies. Immigrant entrepreneurs have enhanced our economy and culture despite immigration law, rather than because of it — that has to change if we are going to grow our economy as President Trump hopes.
The stats on immigrant entrepreneurship and its contribution to our economy are truly staggering. Our research has found that fully one-third of U.S. venture-backed companies that went public between 2006 and 2012 had at least one immigrant founder.
A recent study found that immigrants have started more than half of America’s ‘unicorns’, or privately held companies valued at more than $1 billion. Another examination determined that while immigrants constitute 15% of the general U.S. workforce, they account for 25% of U.S. entrepreneurs and that 31% of founders at VC-backed startups are immigrants.
Knowing of the significant contributions foreign-born founders have made to the entrepreneurial ecosystem and the broader U.S. economy, NVCA has long championed the creation of a Startup Visa for talented immigrant entrepreneurs to remain in the U.S. if they can demonstrate their enterprise is viable and has appropriate funding.
The idea has achieved bipartisan support, in part, because it was immigrant entrepreneurs who founded iconic American brands like eBay, Intel, and Tesla, to name just a few. Rightfully so, policymakers want more of these blockbusters in our country. Against that backdrop, we continue to educate policymakers on the win-win nature of a Startup Visa given the entrepreneurial spirit of so many immigrants and our need for greater economic growth.
Unfortunately, passage of a Startup Visa has been mired in legislative limbo, tied to passage of comprehensive immigration reform—and congressional inaction in that space is well known. Fortunately, there is a way to unleash dynamic economic growth through immigrant entrepreneurship absent congressional action. We just need the Trump Administration to allow for it to go into effect.
During the Obama Administration, the Department of Homeland Security finalized what is called the International Entrepreneur Rule. Under the rule, the federal government would use its discretionary “parole” authority to allow talented immigrant entrepreneurs to remain in the U.S. for two and a half years to build and scale their startup, with a possible extension of another two and a half years.
To qualify, the entrepreneur must have founded a U.S. startup with substantial potential for rapid growth and job creation; the entrepreneur must be well-positioned to advance the startup, such as through significant equity ownership; and the startup must have received substantial capital investment from an investor with a track record of success. It’s not easy to qualify under the International Entrepreneur Rule, but if a founder does then our country and its citizens stand to benefit from something truly special.
The International Entrepreneur Rule is slated to go into effect on July 17th. NVCA worked collaboratively with the Obama Administration to craft the final rule and since President Trump took office in January we have been proactively engaging with his administration to advocate for the rule and the benefits it would produce for our country.
We have already been joined by investors and startup founders in 25 states with emerging entrepreneurial ecosystems that recently wrote to President Trump to encourage him to retain the rule. As the effective date of the rule approaches, we will continue these conversations but encourage other voices from the entrepreneurial ecosystem to join the chorus.
President Trump has said repeatedly that it is his priority to spread economic prosperity across the country. There is no better way to do that than through more entrepreneurial activity, of which immigrant founders play a central role.
The International Entrepreneur Rule will unleash pent up entrepreneurial activity across the country and bring high-quality jobs to our communities. Join us in encouraging President Trump to allow it to go forward so that top talent from around the globe can come to the U.S. to grow dynamic young companies of tomorrow.