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US mulls startup founders visa to lure foreign entrepreneurs

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Paul Graham , a Y combinator partner, had mused about startup founders visa, to be given to entrepreneurs who want to start a startup in US ,  about six months back and since then the idea has resonated with many in the US.

startupvisa_homepage_dec09

The idea is simple. Today it is very difficult for a  foreign entrepreneur to get a green card or an appropriate visa to set shop in US, and this hinders innovation by discouraging enterprising foreign nationals from creating wealth and new jobs.

US currently has a sort of investors visa, granted to foreign nationals that bring at least investment to the tune of $500,000. It is proposed to modify the rules of this visa and to create more such visas such that founders that are able to secure angel or venture funding are granted these visas.

The proposed program would make more visas available to entrepreneurs who have at least $250,000 in funding from a U.S.-based venture capital firm, or $100,000 in angel funding. The startup must also have plans to either create five new jobs every two years, raise at least $1 million every two years, or generate at least $1 million in revenue.

The current system grants 10,000 visas each year primarily to investors that have financed over $1 million with plans to create at least 10 full-time positions. It also allows lower benchmarks for investors in less wealthy countries.

This is definitely a welcome step and would help reverse the reverse brain drain to countries like the India, china etc, wherein techies who have worked in US for some time are returning back home , due to US recession, and are either returning to jobs in India/china etc or creating new start-ups there.

The current strict visa regime was working to the advantage of countries like India, as it forced many enterprising people to to return home and set shop here. with US visa rules relaxed, do you think this would adversely affect the entrepreneurship climate back in India?

If so, should we take a clue and encourage, rather than discourage other neighbouring foreign nationals to set shop in India and immigrate to India if they too bring in talent , can secure funding or create more jobs? 

Its very easy to support relaxed immigration while talking about US visas and at the same time have xenophobic reactions when immigration is talked of in Indian context. Wont immigration and a start-up visa program in India, foster an entrepreneurial climate here too?

What do you think should Indian government do to lure NRIs in US etc to return home and set shop here instead of in US as it becomes ever more easier for entrepreneurs to make their make in the silicon valley? Is India set to loose with this US step or is all is well with more money being remitted back home? In my opinion, what we need is an entrepreneurial climate rather than just money pouring in! do let me know your thoughts!!

  1. sanjay says

    This can give another big opportunities for Indian Body shopping consultancies to manipulate the American Immigration System. In 2006, when the USCIS was about to change the Labor substitution rules, these bodyshoppers sold preapproved labor to new entrants for as high as US$30,000.
    True entrepreneurs need not come to US to setup high income generating jobs in US. They will as well be able to setup in India and if successful would not face any issue in coming to US. Besides there is no shortage of talented people in America.

    So who could benefit the most if this proposal ever gets approved (which is highly unlikely anyway). The “bodyshopping” consultancies will take rebirth as “Startups”. The middleman or agent becomes “Angel Investor” collecting money from Candidates . The unskilled but qualified candidates become the “entrepreneurs” and they will end up working at some client locations for a very low billing rate..

    I am not telling this will happen with all the companies. But such a proposal could really trigger the above possibility and lead to tarnishing the image of India and its really talented people.

  2. Madhav Shivpuri says

    Agree with Raseel – money laundering, body trafficking, terrorism etc., could be US’s worries.

    Foreigners (individuals/ companies) should be encourage to set up shop in India through simplifying the visa process, business start up process, tax holidays, ease rules for repartriating profits made in India etc.,. Banks should also encouraged to lend to new startups at attractive rates and with less paperwork. This kind of entrepreneurial thinking has to start at the Govt. level.

  3. Raseel says

    I don’t think this concept will be as easy to implement as it sounds. There will be a lot of body trafficking to the U.S. if the VISA rules are relaxed even a little.
    From an Indian (or any foreign) entrepreneur’s point of view, this might be good news, cuz the intelligent entrepreneur will just secure U.S. funding and siphon it back home.
    But for the Immigration officials, this will be a management nightmare.

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