Special Visas for Founders of Start-Up Companies

Farhad Manjoo writes for Slate.com:

Andy Grove, Intel’s former chairman and CEO, was born in Hungary in 1936 and immigrated to the United States in his 20s. Jerry Yang, co-founder of Yahoo, was born in Taipei, Taiwan, and moved to San Jose, Calif., with his family as a child. Sergey Brin, who co-founded Google, came to the United States from his native Russia when he was 6. They aren’t special cases: About one-quarter of American tech companies are founded in part or entirely by foreigners. The proportion in Silicon Valley is even higher—a recent survey (PDF) by Vivek Wadhwa, an engineering professor at Duke University, showed that more than 52 percent of Valley startups were founded or co-founded by people born outside of the United States. According to Wadhwa’s research, immigrant-founded firms produced $52 billion in sales and employed 450,000 workers in 2005.

Paul Graham insists that those numbers could be much higher. Graham, a partner at Y Combinator, a venture-capital firm that provides early-stage funding to startups, calls the U.S. government’s immigration restrictions “the biggest constraint on the number of new startups that get created in the U.S.” In May, Graham, whose essays on business and science are popular in V.C. circles, floated a novel idea: He wants the government to create a new immigration class for founders of new firms. Every year, Graham’s “Founder Visa” program would let in 10,000 immigrants who’ve shown a plan for starting a new company. These people would be barred from working at existing companies—in other words, they wouldn’t be “taking American jobs.” Instead, Graham argues, they’d be creating jobs: “If we assume four people per startup, which is probably an overestimate, that’s 2,500 new companies. Each year,” Graham writes. “They wouldn’t all grow as big as Google, but out of 2,500 some would come close.” Click here for the rest of the column.

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