Two of the best-known startup accelerators in the United States are appointing specialists to help immigrant entrepreneurs enrolled in their programmes navigate visa regulations in the country. Silicon Valley’s Y Combinator and Hackers and Founders are among several investors and entrepreneurs who are lobbying with the US government to hasten the reform of immigration laws as they seek to deepen ties with overseas entrepreneurs, including those from India.
“It’s a handicap. The entrepreneurs spend so much of their time filing documents and trying to get visas when other founders can spend that time building their company,” said Kathrina Manalac, partner at Y Combinator. The accelerator, which has backed home rental service Airbnb and cloud storage service provider Dropbox, has so far picked four Indian startups for its three-month long incubation programme. It offers advisory services on visa processes for entrepreneurs and also engages with government to ease regulation.
For Indians, this is an old problem in a new garb. While software engineers have always scrambled to obtain H-1B work permits that allow them to work in the offices of clients in the US, it is now the turn of startup entrepreneurs who are struggling to enter and stay in the United States for business.
For many of them, the US is a magnet largely due to its seemingly limitless supply of venture capital, a strong mentor network and a large base of tech-savvy customers.
“This year alone at least (two) dozen companies have moved to set up shop in the US,’ said Ravi Gururaj, chairman of Nasscom Product Council.
Once they reach there, the situation is not so rosy.
Typically, an entrepreneur moving to the United States for the first time has to travel on a B-1 visa. The 10-year, multiple-entry visa permits entry but does not allow the holder to run a business or claim residency. According to the US Department of State, 18.7% of Indian applicants were refused B-1 visas in 2013.
“It is such a big issue here. We have someone who spends all his time lobbying with Washington officials,” said Jonathon Nelson, founder of Hackers and Founders, which also has a chapter in Pune.
Since 2010, the startup community in the US has been lobbying for passage of what is called the Startup Visa Act. If it becomes law it will grant migrants a green card after two years upon meeting certain conditions regarding job creation and financing. The act has been stalled in Congress twice, and is yet to make progress. “This discussion has always gotten caught up with the bigger comprehensive immigration reform issue. We have no idea when that might happen,” said Manu Kumar, a serial entrepreneur and investor who has been in the US since 1992. He said the problem is very real, even for startups which originate from Singapore, Ireland, and various other countries.
Kumar is part of a coalition of prominent venture capitalists who are lobbying to pass the act, which also includes Eric Ries of “Lean Startup” fame and super angel Dave McClure, founder of business incubator 500Startups.
Meanwhile entrepreneurs caught in the crossfire are looking for alternatives like acquiring an L1 visa, which allows them to extend their stay and run a business.
“It’s obviously a bummer of sorts if someone has an amazing idea to generate employment and services and help the local economy, and there’s a market for it, but they simply can’t,” said Lakshmi Narayan, chief executive of social media benchmarking firm Unmetric, whose company is registered in the US. Some like Anshuman Bapna of trip planning company Mygola said it becomes impossible to take customer meetings at a short notice when on a B-1 visa. Bapna makes regular trips to the US on his B-1 visa, and is just about getting ready to apply for an L-1 as he goes into the next phase of building his company.
Industry lobby Nasscom is of the view that it is up to the United States to push for progress on the Startup Visa Act.
“We hope the US government will simplify the ease of doing business for Indian entrepreneurs in their country,” said Sangeeta Gupta, Nasscom’s spokeswoman.
Krithika Krishnamurthy & Evelyn Fok
Sep 24, 2014
Entrepreneurs ask US to accelerate visa reform
Posted on September 25, 2014