Two new bills now sit before Congress, and both of them could impact the effect of foreign capital ? and foreign-born entrepreneurs ? on US job creation.
The first is Senator Patrick Leahy?s (D-VT) EB-5 bill, which would make the EB-5 visa program permanent. Co-sponsored by Senator Charles Grassley (R-IA), this bill would do precisely what its proponents have been pushing for over the last several years: end periodic Congressional re-authorization of the program and turn EB-5 into an enduring national fixture.
It?s an ambitious effort, and Senator Leahy has made no bones about his support for it since well before last December?s Senate Judiciary Committee hearing on the EB-5 program. In that meeting, immigration attorney Robert Divine spoke on behalf of IIUSA and suggested that Congress make the program permanent sooner rather than later.
If we let EB-5 ?sunset? and face re-authorization in perpetuity, he argued, many investors will be afraid to invest in new projects lest the program expire as they make their long-term plans.
A compelling argument, indeed, but the question is, will the bill actually pass? 2012 is an election year, of course. And we?re faced with a heavily divided legislature that can?t seem to agree very often. Let?s just hope that our elected representatives can find common ground on job creation ? this is a bipartisan bill ? and make something happen.
This is the legislation that IIUSA, numerous regional centers, civic-minded immigration attorneys, and the larger EB-5 community have worked hard to put into place. Its passage would lead to more investment in this country, which means more new jobs for US citizens.
And those things are hard for any politician to oppose, regardless of party affiliation.
Startup 2.0 and potential problems
The other bill doesn?t have to do with EB-5, at least not directly. It?s called Startup 2.0, and it appears to be the latest incarnation of what supporters have dubbed the Startup Visa.
We?ve written about this visa class before. Several times. Lawmakers and investors want to make it easier for foreign entrepreneurs to start companies in the US. Many legislative initiatives have appeared over the past few years that seek to create a new visa category just for these entrepreneurs. The thinking is that it?s too difficult at present to come to this country and start a new company.
The idea enjoys widespread support from Silicon Valley and the venture capital community at large. Some of its biggest proponents are prominent technology investors like Paul Kedrosky and Brad Feld. Senators Kerry (D-MA) and Lugar (R-IN) even introduced legislation back in 2010 to address the possibility of granting residency to foreign-born entrepreneurs.
That law would have turned thousands of excess EB-5 visas (the ones that go unused every year) into visas just for foreign founders, but nothing ever made it to a vote in either chamber.
Startup 2.0 differs significantly from older Startup Visa legislation, but it continues in the same spirit. It would create two new kinds of visas: One for foreign-born students with graduate degrees from American universities ? the degree would have to be in a STEM (science, technology, engineering, and math) field ? and another for immigrant entrepreneurs who start companies in the US.
Contentious immigration politics aside (and this legislation should really be viewed as a job creation effort, not an immigration bill), this bill, too, would seem like legislation that?s hard to oppose. Its sponsors include a menagerie of House Republicans and Democrats, and the whole purpose, according to those sponsors, is to ?create and keep jobs in America.?
But would it really make that big of a difference? Techcrunch just published an analysis by tech entrepreneur Yuri Ammosov, who argues that the bill, as written, would only offer opportunities to a small cohort of the sort of entrepreneurs lawmakers should want to attract.
?Startup 2.0? is not worthless,? he writes, but legislators should ?rename it to STEM Masters? and Doctors? Visa Act. This would be a better description of what?s inside.?
Because only founders with graduate degrees from US universities would be able to get in on the action, he argues. This means that prominent tech entrepreneurs ? people like Niklas Zennstrom, Vivek Wadhva, and Peter Thiel ? wouldn?t have benefitted from this legislation had it been around when they started their companies and had they been trying to get into the US from their countries of origin.
Neither would Bill Gates, Steve Jobs, or Mark Zuckerberg had they been born abroad. After all, one has to be a graduate of a US university to qualify.
Other, older versions of the Startup Visa required a capital raise of $100,000 from a US investor followed by additional investment and job creation quotas over a two-year period. Graduation from an American university was not a hallmark of the proposed bills.
That said, StartUp 2.0 and EB-5 permanency still call for more innovation, more investment, and more jobs for Americans. Let?s hope Congress sees it that way, too.