How young entrepreneurs, activists are hacking a broken immigration system to find ways to keep talent, create jobs
By Sonia Su
BOSTON—Imagine that you were one of the nearly one million international students studying in the U.S. on a student visa in 2013. Soon, the post-graduate program you had to apply for to stay an extra year in the States will expire.
During that time, you invented a “smart” cooking robot as the CEO of a startup. Without finding another way to remain in the country, you would have to return to your home country, relocating everything you had built here.
Now imagine spending about $4,000 to apply for the H-1B visa, one that U.S. businesses use to employ high-skilled workers in fields such as science, engineering and computer programming. But in order to qualify, you must step down as CEO and leave the fate of whether you can stay in the country to a computer that randomly selects winners of this H-1B visa lottery.
This is the story of Hanlin Hong, co-founder of Worcester-based robotics startup Tech-No-Logic—and a story similar to countless others year after year.
Jeff Goldman, a lawyer with 23 years of experience working on immigration, said he has witnessed many cases in which startup founders with “unbelievable ideas and proprietary technology” cannot obtain the H-1B visa.
“It’s terrible. It makes no sense,” Goldman said. “[Bringing in foreign nationals] is good for our economy … Everyone seems to understand it. Everyone seems to want to have enough H-1Bs … but Congress can’t seem to get out of its own way to make that happen.”
Just one week after applications opened on April 1, the USCIS announced that it received a record-breaking 233,000 H-1B petitions, far surpassing the statutory cap of 65,000 visas allowed per year and 20,000 for applicants who hold at least a master’s degree. Although applications exempt from the cap will continue to be accepted, the H-1B visa is part of the ongoing problem with immigration.
“Everyone seems to understand it, but Congress can’t seem to get out of its own way to make that happen.”
With U.S. Citizenship and Immigration Services providing no other similar options, Goldman said, “I think we’re hurting ourselves.”
And while the numbers keep increasing, the visa cap remains fixed. For the eighth consecutive year, the number of international students in U.S. higher education has increased, with about 72 percent more students studying in colleges and universities than in 2000, according to the 2014 Open Doors Report on International Educational Exchange.
For the 2013-14 academic year, the number of international students enrolled in U.S. higher education increased by eight percent to 886,052 students, with 66,408 more students than the previous year, according to the report.
Here on student visas, if they wish to stay in the U.S., international students must apply to the Occupational Practical Training, one of a few post-graduation programs that Growthology contributor Chris Jackson said are “mere band-aids on the wound.”
“After 12 months of working in a STEM firm, whether at a business they founded or as an employee, the foreign graduate must return to their home country unless they are granted a one-time 17-month extension or acquire a new visa,” Jackson wrote for the Kauffman Foundation, a Missouri-based private foundation focused on education and entrepreneurship. “This restrictive process creates an incredible waste.”
‘COMPREHENSIVE’ OR ‘STEP-BY-STEP’?
Immigration reform was a major component of President Barack Obama’s campaign platform, but in 2012, the White House announced that Obama opposed the STEM Jobs Act, an immigration reform bill backed by companies such as Apple and Microsoft that would allow U.S.-educated tech workers to remain in the country.
The reason? It “does not support narrowly tailored proposals that do not meet the President’s long-term objectives with respect to comprehensive immigration reform,” according to the White House statement.
Despite Obama’s support of the immigration bill in 2013 that passed in the Senate, the House rejected the bill, with Speaker John Boehner saying, “We’ve made it clear that we’re going to move on a common-sense, step-by-step approach in terms of how we deal with immigration.”
So as far as the government’s concerned, the problem does not fall under what Rep. James McGovern, after meeting the seven-member team behind Tech-No-Logic, told CharterTV3 is one among the citizens.
Critics commonly use the argument that allowing foreigners to stay would somehow take away jobs from American citizens, McGovern said.
“The reality is that some of the products that we saw being developed in here [at Tech-No-Logic] are going to create countless jobs for people of all backgrounds here in the United States,” he said.
In fact, immigrants were almost twice as likely to start businesses in 2012 as U.S. citizens, according to the Kauffman Foundation, with their engineering and technology firms employing about 560,000 workers and generating $63 billion in sales in 2012.
And it seems that legislators understand the powerful economic impact, with Sens. Jerry Moran (R-Kan.) and Mark R. Warner (D-Va.) showing that perhaps persistence is key.
“The reality is that some of the products are going to create countless jobs for people of all backgrounds here in the United States.”
Moran and Warner “proposed the original Startup Act in December 2011. Startup Act 2.0, which had a few tweaks, arrived the following year, and Startup Act 3.0 was pitched the year after that,” according to the Washington Post. “At this point, the bill’s authors have decided to stop counting, reverting to the original moniker, the Startup Act.”
Then last November, Obama introduced the Entrepreneurs Pathways program, the support for which immigration reform advocacy group FWD.us has taken the lead.
Quoting Silicon Valley “super angel” investor Ron Conway, the blonde twenty-something spoke quickly, not without exuding passion: “Nothing worth doing is going to be easy.”
Along with regional organizer Ali Procopio, Andi Dankert—recently promoted to New England chapter director—leads the Boston chapter of FWD.us, founded in April 2013 by Mark Zuckerberg, Bill Gates and other technology and business leaders.
As one of her roles, Dankert—who left her job working for Michael Bloomberg, former New York City mayor, to join FWD.us first in New York—organizes monthly meetings for the Boston chapter with Procopio. Open to all, the monthly meeting aims to push the Greater Boston community to be more active in immigration reform advocacy, with the most recent meeting held on April 28.
“Our immigration system is broken,” Dankert told the members seated around the wooden table at the Venture Café space in Cambridge.
And a “piecemeal” effort can still lead to comprehensive reform of a 40-year-old problem, Dankert said.
Its upcoming plans include defending and implementing executive action, working toward passing the high-skilled immigration bill (also known as the I-Squared Bill) and focusing efforts on the 2016 presidential election.
In addition to the efforts of FWD.us, Boston’s own venture capitalists have been working toward implementing a solution to get more entrepreneurs to stay in Greater Boston. Jeffrey Bussgang, general partner of Flybridge Capital, with Brad Feld, who holds both bachelor’s and master’s degrees from MIT, formed the Global EIR Coalition.
As a workaround for exemption from the H-1B visa cap, the coalition partners entrepreneurs with universities to provide “relevant part-time work opportunities,” according to the website.
Goldman, who serves as the lawyer for Global EIR, said that former Gov. Deval Patrick “loved the idea,” and insists that, having had phone calls with the federal government, this is in compliance with the law and not “secretive.”
“It’s got extraordinary potential and could attract thousands of entrepreneurs,” Bussgang, named No. 34 of Boston magazine’s 2015 50 most powerful people, said in the magazine. “There isn’t perhaps as much change-the-world ambition on a global scale here. If you’re an incredibly ambitious entrepreneur, there’s this sucking sound from Silicon Valley.”
FACE TIME WITH CONGRESS
But with only two entrepreneurs so far benefitting from Global EIR since its launch in spring 2014, entrepreneurs decided to help accelerate the process and go directly to the policymakers.
Earlier this April, founder of digital learning tool Hstry Thomas Ketchell traveled to D.C. with Hong and 13 other immigrant entrepreneurs and innovators from across the country. They spoke with more than a dozen legislators on Capitol Hill, advocating for reforming the high-skilled immigration system based on their personal experiences.
Hong, who attended the April FWDMonthly meeting, said his biggest takeaway from the trip was that speaking directly with policymakers was a great opportunity to share his story.
“As a foreigner in the U.S., I don’t have a right to vote for anything, but I still want to express my opinions so I need channels to do so,” Hong said at the meeting. “[The representatives] are very friendly, so I encourage others to be fearless and try to talk to them.”
Dankert pointed out that immigration reform does not seem to be a priority, and it can be hard to ask for support for an issue that should not be but tends to be “highly politicized.”
“They know our names. We’re annoying to them, but that’s how we should be,” Dankert said, reiterating Hong’s point about getting “more face time” with representatives.
And there seems to be little resistance, with three out of four Americans who say they are in support of immigration reform. But Dankert said in the meeting that legislators have said they have actually received an “overwhelming number” of anti-immigration calls. The problem, therefore, is not the support but lack of activism from reform supporters.
“It’s absolutely crazy to think that someone can create that amount of jobs and be on path to create thousands and still not be able to live here permanently.”
“What amazed me about [the trip to D.C.] was it’s just unbelievable how many case studies there are, how it’s really affecting the economy. Every one of these 15 people all knew 20 people themselves that have had issues like that,” Ketchell said in an interview in his office at LearnLaunch in Boston.
In D.C., Ketchell met Eren Bali, co-founder of Udemy—the largest platform for online courses—and a San Francisco FWD.us chapter member.
“He’s created 300 jobs in San Francisco,” Ketchell said. “It’s unbelievable, and he still doesn’t have permanent status here. It’s absolutely crazy to think that someone can create that amount of jobs and be on path to create thousands and still not be able to live here permanently.”
Eren’s co-founder at Udemy was denied an H-1B visa, with company and its employees forced to return to Turkey and Dublin.
After the trip, Ketchell blogged on the FWD.us website about this experience, writing, “Eren has hopes of launching a new company in the U.S., but he’s worried about the broken visa system, and doesn’t know if starting another company will be worth it until the system is more friendly toward entrepreneurs.”
Ketchell now works in the U.S. on a business visa, while his other two co-founders are in Europe.
“[The business visas] go in batches of six months, but the major issue is you can’t keep coming in and out of the country,” Ketchell said. “We are trying to hack our way through the system.”
But these “hacks,” such as the Global EIR, are only short-term solutions, he said.
“It’s still not really going to help hundreds of entrepreneurs long-term, but it’s getting there,” Ketchell said.
But are these initiatives acting quickly enough?
“Every year—and again it will happen in May and June next year—40,000 to 50,000 people will be graduating with PhDs and masters’ degrees, and half or so will end up having to leave,” AOL co-founder and venture capitalist Steve Case told CNET. “Some of those people will go back to their countries and start companies that could end up being the next Googles or Facebooks.”
By sending top talent away, the U.S. is its own biggest challenge to keeping up with the growing world economy, wrote Mark Weinberger, global chairman and CEO of multinational audit firm EY.
“EY regularly recruits on university campuses, and I can’t tell you how many times we’ve had to turn away some of our best applicants because we know they can’t get the visas they need to stay in the U.S.,” Weinberger said.
But for Hong—whose name means red, the color of luck, in one Chinese translation—this is a story with a happy ending. At the Tuesday meeting, he made an announcement.
He won the H-1B lottery.
YOU MIGHT ALSO LIKE…
More readings on immigration reform in the news.
Getting a Visa Took Longer Than Building Instagram, Says Immigrant Co-Founder
Pack Your Diplomas, International Students
The H-1B visa race continues: Which regions received the most?
Hacking Immigration: The Global EIR Coalition by Jeff Bussgang
Announcing the Global EIR Coalition by Brad Feld
Actions you can take, collection of stories from immigrant entrepreneurs, etc.
Sign the FWD.us Policy Brief
Discover Stories: Massachusetts
Immigrant Entrepreneurs Attend Advocacy Day in D.C.
FACTS TO CONSIDER
Courtesy of the Kauffman Foundation.
The Economic Case for Welcoming Immigrant Entrepreneurs:
- 24 of the top 50 venture-backed companies in America in 2011 had at least one foreign-born founder.
Immigrant founders from top venture-backed firms have created an average of approximately 150 jobs per company in the United States.
- 27.1 percent of new entrepreneurs in 2012 were immigrants, which is up from 13.7 percent in 1996.
- About one-quarter of the engineering and technology companies started in the United States between 2006 to 2012 had at least one key founder who was an immigrant.
- While not all businesses receive outside investment capital, viable businesses will generate revenue. Recognizing that it can take time to develop, market and sell a product or service, revenue-generation over time could be a measure of potential entrepreneurial success.
- Since a startup visa is meant to boost economic growth and create jobs, initial job creation could be a measure used to determine visa eligibility, so long as the requirement is not overly restrictive.