Nearly a third of all venture-backed company founders are immigrants. What’s more, just over half of all U.S. startups worth $1 billion or more were started by people not born in this country, according to research by the National Association for American Policy.
So why does it seem, at least to many investors and tech executives, as if the current administration in Washington is making it hard for immigrants to start new companies here today?
That was the central topic discussed at a breakfast event in San Francisco last week sponsored by the NVCA, the venture-capital industry’s main trade group. The panel discussion, titled “Immigrant Entrepreneurship in the Trump Era” and moderated by San Francisco Chronicle reporter Trisha Thadani, included insights about current legislative battles as well as personal anecdotes from entrepreneurs and investors about new obstacles they say immigrant entrepreneurs are now facing in the U.S.
“We’re basically telling the world, it’s going to be difficult for you” to come here to start a company, said panelist Monisha Merchant, who sits on the board of the Center for American Entrepreneurship. Merchant said making it easier for immigrants to get visas and start companies will help create more American jobs.
The NVCA, in fact, in September joined other parties in suing the U.S. Department of Homeland Security in federal court over that agency’s delay in implementing the International Entrepreneur Rule, a policy enacted by the previous administration that would allow foreign-born entrepreneurs to remain in the U.S. to grow their companies. The delay means that “the U.S. economy will miss new businesses and jobs that would have been created, but that unfortunately will now be created overseas,” the NVCA said in a September statement announcing the lawsuit.
On Dec. 1, the NVCA scored a legal win when a U.S. District Court judge ruled in favor of the group and said the government would have to start accepting applications for foreign-born entrepreneurs who want to participate in the program. But the administration is now working on a new rule called “Rescission of the International Entrepreneur Rule”, according to NVCA officials, implying that more battles are to come.
Indeed, the nationwide immigration debate, and the possibility of more restrictions, “is a constant distraction” for entrepreneurs and many investors, said Mamoon Hamid, a partner at KPCB, which hosted the panel event at his firm’s offices last week. “I think we’re in a pretty precarious position.”
Nicky Goulimis, the foreign-born co-founder and COO of San Francisco-based startup Nova Credit, talked at the event about getting stuck back in the U.K. because of visa issues when she traveled home recently to attend a wedding. She couldn’t come back to the U.S. for three months, forcing her to work crazy hours in the U.K. to manage her company—and scramble to obtain a new visa, which she eventually did.
But for a time, “I didn’t know if I would be able to come back,” said Goulimis. She had been hoping to take advantage of the International Entrepreneur Rule.
Indeed, the topic of immigration is often personal as well as business-related: Battery Ventures General Partner Neeraj Agrawal has written about his own family’s immigrant experience, as well as the successful partnerships he’s formed as an investor with top-flight immigrant entrepreneurs.
“I continue to be amazed that the U.S. is not doing more to nurture smart, creative and job-creating immigrant CEOs, and is instead making it harder for them to come here and start companies,” Agrawal said. “Twenty-six percent of the market cap of the S&P 500 is in the IT sector, outpacing every other area of the economy. This shows how much the overall economy relies on the technology industry, and by extension, immigration as well.”