Entrepreneur Stuck In Canada Highlights The Need For A Startup Visa Now

from the this-shouldn't-wait dept

Wed, Sep 30th 2009 1:39pm — Mike Masnick

I've publicly thrown my support behind the idea of a startup founders' visa that makes it much easier for foreign skilled workers who want to come to the US to start companies and create jobs to do so. Right now, our immigration policies do not favor entrepreneurs at all. The good news is that this very grassroots movement has actually picked up some steam, with a ton of support from the startup ecosystem around the country. Whether or not that translates to enough political momentum remains to be seen.

To understand just how important this is, here's one story of an entrepreneur who's been working hard to help build a startup in Silicon Valley who, only just this week, has found himself stuck in Canada unable to get back to the US, despite believing he had the proper visa (in this case, an H-1b). The story is depressing, and reminds you of all the ridiculous bureaucracy that people are forced to go through for something that makes no sense:

Just as everything seemed to be going so well, I came up to Vancouver on September 24th to renew my H1b visa and it turns out the approval I got last year is not worth it's weight in paper. Upon appearing for my interview, my previous approval notice was held by the consulate till I furnished a ton of extra documentation from our tax filings last year, to a full report of all employees, all of my bank statements right down to the photographs of our work area (as alien founders we cannot have startups in garages and our apartments, it has to be in real offices).

I worked through the rest of Thursday and all through the night gathering all this evidence.... So after working through the night to get the evidence to the officers the very next day by 11:30 am, I was told that my application would take a week to be reviewed.

My biggest concern is that an LLC due to it's structure doesn't pay a salary to it's members but a guaranteed payment. My attorney has already warned me that this is a slippery slope to start explaining to consular officers when the time comes.

Now leaving aside the exorbitant costs of living in a city like Vancouver for a week, I don't have to talk about what an entire week means in startup terms. This particular week in question, since we're in fundraising mode, I have had to cancel a meeting with Comcast Capital and cannot present at the Plug and Play Expo on Thursday Oct 1st - they were nice enough and believed in our product to pretty much waive the $1500 participation fee, only to realize I can't make it.

It makes no sense that someone like this should be going through this sort of ridiculous bureaucratic process, held back by bureaucrats who don't understand how startups work.

Brad Feld, the venture capitalist who deserves all the credit in the world for taking this concept -- originally proposed by startup investor/mentor Paul Graham -- and actually getting some political interest in it, has a post discussing the momentum and some open questions.

The main open question he brings up is about how investors can "sponsor" an entrepreneur. Basically any qualified venture capitalist or "super angel" who is investing at least $100,000 in a round of at least $500,000 could sponsor a founder. I have to be honest that I'm not sure I agree with this. Why should the visa be dependent on financing? These days, we're hearing about more and more startups that are bootstrapping their way to success, or getting by on much smaller amounts of money. If a founder can build a successful company without raising $500k, should they not be allowed to take advantage of the startup founder's visa as well?

The proposal goes on to have renewal rules, as well, that also are dependent on job creation and raising more money. The job creation bit I can understand, but again I am troubled by the "raising money" bit. Why should the investors be the gatekeepers in determining who gets to be an entrepreneur?

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Filed Under: entrepreneurs, immigration, startup founders visa, startup visa, startups

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Johnny Wrath (profile), 30 Sep 2009 @ 1:57pm

Bureaucratic process and advertising are the only things that are going to make money in The US in the 2010s. I have the feeling that becoming an entrepreneur will involve an increasing amount of financiering so that nobody motivated enough to make money with their own company can ever escape the debt of those who already had enough money to invest in the start-up. Oligarchs obviously not included as "nobody".
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Anonymous Coward, 30 Sep 2009 @ 1:58pm

Having unnecessary investment by venture capitalists, for example, can be devastating to startups. While it is important that a business have enough capital to operate, this often means that an otherwise successful business must spend much of its energy trying to get rid of all that money, and in a way that doesn't piss off whoever poured that money into the company. While it's not as bad as it could be, this could be a death knell for foreign-owned startups in the U.S.
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Leviathant (profile), 30 Sep 2009 @ 3:13pm

Do not mess around with the BCIS/INS
Immigration is a bitch. My wife immigrated to the US from Australia - and we made VERY well sure that everything was kosher with the BCIS before she ventured out of this country.

If you don't have time to look that stuff up for yourself, hire an immigration lawyer.

There is no shortage of bureaucracy revolving around American immigration, but if you can't handle that... eh. I shouldn't get too presumptuous, really. For everything they officially tell you about immigration, there's a good measure of things you seemingly have to find out through other immigrants who've been through the process.

Bottom line: When you're an immigrant in the US, be prepared at any time to deal with this kind of thing, just in case. Good luck, Sharan.
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Anonymous Coward, 30 Sep 2009 @ 3:18pm

Don't you mean "Entrepreneur unable to re-enter USA while visa application evaluated complains about US immigration rules"? I don't see anywhere in your article where it says the protagonist cannot leave Canada.
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PrometheeFeu (profile), 30 Sep 2009 @ 3:30pm

I recently immigrated to the US and I can agree that it is a real pain in the behind. I can understand the desire to not have someone live off welfare, but it is ridiculous. Under my extended student visa I had a decent job which paid me enough to not live off anyone except myself. However, when I tried to get my green card based on marriage to a US citizen, it took a year so by the middle of the process, I had to quit my job. Now, normally, they give you a temporary work authorization while they consider your application which would have allowed me to resume work. However, because I was no longer working, my application was suddenly insufficient and I could not get my work authorization back and they were threatening to deny my application unless I got someone to sponsor me. Yes, that's right, I was not allowed to work because I was not making enough money to qualify for a work authorization... What kind of a stupid idea is that? By the time my work authorization came in, my company, had had to find someone else and was not interested in rehiring me. (Nor were many people given the economic crisis)

I mean, seriously... All I want is be able to work here, pay my taxes and live with my wife in her country of origin. Why was there a bureaucracy that stood in the way for a whole year? Not that I can complain too much given France's (my country of origin) current immigration policy.

I mean, I see why people are afraid of immigrants. They might steal your jobs and your women. But guess what... The job market is not a pie that you have to split. When new people show up, (especially, college educated or experienced people) the pie grows and everyone benefits.
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interval, 30 Sep 2009 @ 4:02pm

Anotherr Example
The recent cash for clunker program exemplifies this. More than one car dealer was trotted out on national news programs (mostly Fox) to show the amount of paperwork they had to do to get a payout for a clunker, which they then ended up waiting for months to get the cash for. It was ridiculous.

The US Government is too big, too bureaucratic, and so wasteful its impotent. Recent homeland defense snafus (waste, employees spending ALL their on-clock time surfing for pr0n, internal agencies not communicating with each other, one-ups man ship) leaves me groaning every time I have to listen to some one try to sell me this insane Federal health care "plan".
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Cixelsid (profile), 30 Sep 2009 @ 4:26pm

Bureacracy
We have sort of the same situation here in Germany, its very difficult for foreigners to start businesses, even EU nationals, the result is pretty much what you'd expect, businesses move to Austria and The Netherlands, where there's less paperwork and tax benefits for foreign nationals.
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R. Lawson, 30 Sep 2009 @ 5:52pm

True entrepreneurs OK - but not on H-1b visa
I'm not opposed to the United States welcoming entrepreneurs. However, the H-1b visa is subject to high levels of fraud. Allowing this to be an entreprenurial visa without fixing the many flaws would open just one more loop hole that people would abuse.

You need not look far to find fraud and abuse in the H-1b visa program. I for one am glad that the government is examining this program closer. I don't know the details of this case, but as they say there are two sides to every story. What is the government's side?
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PT (profile), 1 Oct 2009 @ 1:23am

Couple of things
It's extremely difficult to get any kind of visa to work in the US unless you already have a job offer in the US. I need hardly point out that it's extremely difficult to get a job offer in the US unless you already have a work visa. My hat's off to anyone who starts a business here without achieving permanent status, preferably citizenship, first - there aren't many riskier investments! I wouldn't have done it. I'm an immigrant myself. I came on an L1 visa, inter-company transfer. It took me twelve years to achieve citizenship, in the middle of which I nearly got deported because when I went to renew my green card, the INS had no record of giving me one previously.

Some people don't have any problems, though. If you come from Cuba for example, and manage to set one toe on US soil, the US government assumes you're fleeing persecution and will hand you nearly instant citizenship. Sharan could have flown to Havana and taken the boat. Or, he could have become an ordained clergyman (of any religion) and picked up his green card at the front desk on the way in. Failing that, he could have said he was a newspaper proprietor and been granted citizenship by Act of Congress in 24 hours, like Rupert Murdoch. Or, he could have retained the legal firm of Holmes, Khatri and Townsend in Orlando, Fl, and had them put his application in for the visa lottery. At least one year, mid-90s, they put about 130 applications in and won all but 2 of them, the odds against which are greater than the number of protons in the universe.

On immigration generally, I find it ironic that the same group of people who bitch the most about H1B visas, on the grounds that people willing to work for less money might force wages down, also tend to be opposed to trade unions, which exist so that people willing to work for less money can't force members' wages down. Strange, that.

PT - member in good standing, United States Workers local 101
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Vivek Chandrasekhar, 1 Oct 2009 @ 7:20am

Why jumping the fence may be a better idea than being a law abiding coward ..
It is amazing how so many well accomplished people talk about this issue year after year and nothing happens to rectify the situation . Is this how America was back in the days ?

I came to your country , attended a decent university and put everything together to get my hitech business up and running. And guess what.. when the funds, team and every other seemingly difficult obstacle were overcome, here comes the surprise - America does not have a Visa for startup founders ! No worries, today I am happily settled in Singapore on the 'EntreVisa' - Singapore's version of startup Visa , just raised $250k and am happily nurturing my dream .

I thought America is where merit always triumphs or did I get it wrong ? Is it so difficult for the silicon valley folks and the so called social advocates to make this thing a reality ? Or would you rather have the foreigners locked in on their H1B visas so they can be milked like slaves for a decade or so til they get their green cards?

Oh and by the way, America does have a startup Visa. It is called the EB-5 but not even a handful of people use it every year because it is designed to drive away anyone with a resonable risk appetite.
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Dave Chapman, 14 Oct 2009 @ 9:23am

A History of Fraud Comes Back to Bite You
OK. Here's the political deal:

The H1-B program was supposed to be for highly skilled people and it supposedly included protections to prevent American workers from being replaced with H1-Bs. The big expansion of H1-B coincided almost exactly with the dot-com collapse, and crooked employers imported 900,000 H1-Bs while getting rid of 900,000 US citizen workers.
Therefore, you have thousands of American citizens who are opposed to any kind of immigration program, because they were lied to last time.
All of the nice talk when H1-B was being proposed was a pack of lies. The purpose of H1-B was always to import cheap slave labor and to replace US workers.
So, the bottom line on immigration is this: Whatever you're selling, we're not buying it.
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Vidli, 21 Oct 2009 @ 3:15pm

True Entrepreneurs are like Hobbits
Consultants, fake entrepreneurs and VC trying to seize all leverage are the force that would be the death of this movement. That's why those who believe in true entrepreneurism and the people behind it must speak up.

All hail hobbits, elves and good men...down with goblins and wicked wizards...

Lord of the Visa - http://twurl.nl/57i3i8
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displaced, 23 Oct 2009 @ 10:41am

H-1B is an employer sponsored work visa. It is ILLEGAL for H-1B to run their own US business
Does not matter how you feel about the H-1B visa program, this person violated US law. The H-1B program is an employer sponsored visa for temporary guest workers. The H-1B program is NOT for entrepreneurs . Google H-1B and business owner and you will find a news articles about how government agencies prosecute these criminals.
Bravo to the immigration officials in Canada who caught this illegal activity.

Thank you,

Highly qualified American Tech Worker displaced by H-1B and L-1 visa workers.

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Neal, 10 Oct 2010 @ 8:58am

Canadian trademarks for start-ups promotion program starts on October 12, 2010:

http://www.pinskylaw.ca/News/news.htm
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Anonymous Coward, 7 Jun 2012 @ 1:18am

It's not just entrepeneurs that have trouble. I work for an american company that has people all over the world (i.e. we work in our own country, practically dragging money straight to the US), and a number of us have been denied entry at some point (and once you're flagged, the fun really starts). It even got so far that we prefer to hold meetings outside of the US. And we are not the only ones. We once contacted the dept of commerce about this at a conference, and they are very well aware that the US is losing business this way.
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