Congress is making strides toward a competitiveness bill and has an opportunity to unleash entrepreneurship across the country. Included in the House bill is a critical provision that fits perfectly in the final package: a Startup Visa to ensure the world’s best entrepreneurs can create new, high-growth companies in the United States.
Let’s back up: The primary source of job creation is new and young companies. We need more of this activity to meet massive challenges like cybersecurity and climate change. The United States has gained from immigrant entrepreneurs who have created companies like Moderna, Zoom, Tesla, and AT&T, and half of all “unicorn” companies were created by immigrants.
But today, immigrant entrepreneurs who have a brilliant startup idea do not have to come to the U.S. as they did in the past. Competing countries have taken a page out of the American playbook and are marrying entrepreneurial talent, technological and scientific know-how, and new pools of capital. This trend is accelerating around the globe. At the same time, the U.S. is handicapping itself with shortsighted immigration policy that pushes away top founders.
When foreign-born entrepreneurs cannot start companies in the U.S., two problems are created: Our country loses out on job creation and innovation, and we create competitors in other countries. That is because more than 20 countries have created Startup Visa programs to recruit entrepreneurs to their shores. In Canada, Toronto and Vancouver are thriving startup ecosystems and outstanding options if an entrepreneur is not allowed to immigrate to the United States. Canada’s Startup Visa program facilitates job creation for that country as our country throws up a giant stop sign.
Our lack of a Startup Visa means founders try to fit square pegs in round holes and use visa categories that are not meant for the entrepreneurial model. As a result, these job creators regularly slip through the cracks and cannot obtain the needed immigration status to start an American company. A Startup Visa would solve this problem by creating a dedicated visa category for entrepreneurs who are significant equity owners of the company; have attracted considerable outside capital; are active and central to the company; and will ultimately create American jobs. This is a thoughtful test to ensure only the most meritorious company creators qualify.
The Startup Visa complements the other elements of the competitiveness package. Fortunately included in the Senate’s U.S. Innovation and Competition Act is a focus on new company formation that ensures federal investment in basic research produces new technologies and private sector jobs and not just academic white papers. But for this to work, our country needs dogged entrepreneurs who want to take innovative ideas and turn them into companies. A Startup Visa would deliver entrepreneurs at precisely the right time given the aims of the competitiveness legislation. Leading companies relentlessly focus on their talent acquisition strategy to win in the marketplace. The U.S. government should do the same for our country.
A Startup Visa is a can’t lose job creator: To remain in the U.S. under the Startup Visa, the entrepreneur must create American jobs. That is why the National Foundation for American Policy has found that similar proposals could create more than 3 million jobs over a decade. That figure could be low, as one world-changing entrepreneur could create the next blockbuster company.
Startup Visa legislation also fits well in the competitiveness bill because the concept has attracted bipartisan support over the years. The language in the House competitiveness bill comes from Rep. Zoe Lofgren’s Let Immigrants Kickstart Employment Act, and senators on both sides of the aisle have been bullish about including similar provisions in a final package. In the Senate, the Startup Act creates a Startup Visa and has been led by Senators Moran, Warner, Blunt, and Klobuchar.
Finally, a Startup Visa is important from a national security perspective. Endorsed by the National Commission on Artificial Intelligence, a Startup Visa creates more American companies, which in turn become subject to bodies like the Committee on Foreign Investment in the U.S. that scrutinizes inbound investment for national security concerns. When companies are overseas, they are largely out of the reach of CFIUS and other institutions. Creating more American companies also gives the Pentagon more options for procuring the best technology for the warfighter, since federal procurement law curtails buying from foreign companies.
The Startup Visa is the ultimate free lunch of American politics with a virtually uncapped upside potential for our country. The current competitiveness effort is the time to seize this opportunity with both fists and unleash its potential.
Jeff Farrah is general counsel of the National Venture Capital Association.