As of today, it’s been 170 days since the inauguration of President Biden.
And among the topics of interest to the venture community that the new administration and the Democrat-controlled Congress have begun to address are infrastructure, regulatory reform, taxes and antitrust proposals.
Get ready for more discussion on the topic of immigration.
Next week, the venture community should pay attention to a hearing by the House Judiciary Subcommittee on Immigration and Citizenship called “Oh Canada! How Outdated US Immigration Policies Push Top Talent to Other Countries.” You can learn more about the hearing by clicking here.
The National Venture Capital Association, among others, hope this hearing will create the momentum necessary to enact a Startup Visa.
It took a federal court order to implement the International Entrepreneur Rule in 2019 to allow foreign-born entrepreneurs to launch high-growth start-ups in the US. The rule, established under the Obama Administration, allows for immigrant entrepreneurs to remain in the US for two-and-a-half years, with a possible extension of another two-and-a-half years. The rule came under fire in the previous administration, and it took a lawsuit, with the NVCA as lead plaintiff, to implement it.
Still, despite the contributions of foreign-born entrepreneurs in the US, the country lacks a start-up visa that facilitates new company formation by immigrants. The NVCA has urged the incoming administration to consider other immigration proposals that will allow more immigrants to help launch start-ups in the US, such as STEM visas.
Numerous immigrant-founded companies, many of which are household names now, have grown to become successful companies, such as Moderna and Zoom. As the NVCA says, the contributions of foreign-born entrepreneurs are despite US immigration law, not because of it.
An NVCA report found that one-third of US-based, venture-backed companies that went IPO between 2006 and 2012 had at least one immigrant founder.
Meanwhile, other countries are taking advantage of US immigration policy, particularly in terms of drawing in talent. Jennifer Young, chief executive of the Technology Councils of North America, is testifying in the “Oh, Canada!” hearing next week. She notes that Canada has taken a “pragmatic and balanced approach to position their country to be a world contender in the fields of artificial intelligence, automation, and the creative industries. Make no mistake, the Canadians have come to compete. Across their nation, cities like Toronto, Vancouver, Montreal and Winnipeg have become magnets for American companies looking to tackle complex issues with some of the brightest minds.”
Michael Brown, a Boston-based general partner at Battery Ventures, and newly appointed chair of the NVCA, told me: “The US used to be the place where immigrants got educated, started a business, and pursued the American dream. We now find ourselves in a competitive world and the US is losing steam.”
As disruptive as the pandemic and the recession were, venture activity in the US has largely bounced back. And perhaps even thrived. I don’t want to sound jingoistic, but it will be interesting to see if the same will be said if no steps are taken on US immigration policy. Who will win the competition to draw in foreign-born entrepreneurs?
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