"Start-Up" Visa Makes Sense for Silicon Valley

Two bright, energetic, Palo Alto-based entrepreneurs recently sent me a link to Startupvisa.com. A visa designed for the entrepreneurs of a start-up company would have been perfect for them. Instead, we had to wrestle their jobs and their company into the H-1B category.

The H-1B visa permits a U.S. employer to employ a professional worker. Using the H-1B category for entrepreneurs can be challenging because often the new venture begins as a one or two-person company. A typical case is the foreign national who comes to the U.S. as a student to earn a Master's degree. While in school, they develop their own ideas for new ventures, and also develop business contacts. Upon graduating (or even before), they begin working on their new ideas and attract venture funding. Soon after, they establish a formal business entity. At some point, the foreign national realizes that they need the appropriate visa to continue working on their new U.S. venture.

The challenges with a small, newly established company sponsoring its only employees for an H-1B visa rest, in some part, with the USCIS' perception that small companies do not need H-1B workers. Companies with less than 25 employees, established less than 10 years ago, and with gross annual income under $10 million will be highly scrutinized for fraud, and will likely be required to submit additional documentation establishing the need for the professional worker. An additional challenge with the H-1B visa is the annual cap 0f 65,000 new visas. Except for this year, the past several years have seen the cap reached within the first week that new visas become available.

The E-2 visa is supposed to be an option for investors and entrepreneurs. However, the challenges with this option are that the entrepreneur must also be the investor, and that this visa is only available to people from certain countries. An employee of an E-2 qualifying company can actually qualify for an E-2 without being an investor, as long as they are going to be employed in an executive or supervisory capacity, or if they have essential skills or knowledge. However, the challenge is that the employee must be from the same country as the principal investors, and the principal investors cannot be U.S. citizens or U.S. permanent residents.

The "start-up" visa makes sense. The "typical case" described above would be the ideal candidate. Someone with innovative ideas, who can raise capital, and has the ability to start and maintain a new company should be provided the opportunity to stay in the U.S. and grow their company.

The start-up visa requirements could be similar to those of an E-2, but be open to foreign nationals of all countries. That is, an applicant would need to show an investment large enough to fund a new business and to get it rolling. In contrast to an E-2 visa, a start-up visa would allow the entrepreneur-worker to submit the visa application, instead of the employer. The allotted time period for an initial start-up visa could be for one year, similar to the L-1, intracompany transfer visa used to open new branch offices in the U.S. After an initial one-year period, the start-up visa applicant would apply for a visa extension and be required to show that the business is still operating and that they are still running or working with the business. To address those "serial entrepreneurs" that bless Silicon Valley, applicants should also be able to show that they have started up another business if that is the case.

It truly does not make sense for the U.S. to send some of the brightest minds back to their home countries to start innovative companies, when those folks want to remain in the U.S., and would remain in the U.S. if there was an appropriate work visa for them. The "start-up" visa makes sense for Silicon Valley, as well as for the rest of the country.

H-1B Visas, Work Visas / by Michelle Gee