Editor’s note: Investor and entrepreneur David Gardner is founder of Cofounders Capital in Cary and is a regular contributor to WRAL TechWire.
CARY – Politics and political issues can be the third rail if your job every day involves working with investors and entrepreneurs from all over the political spectrum but I’m going to stick my neck out some here over an issue that seems to be coming up a lot lately.
I’ve been working for the last few months with a bright and tenacious entrepreneur studying at Duke University. He developed a very cool new technology in the fintech space. After code reviews and discussions with a number of banking executives, we determined that his technology and venture was very fundable. He had won a number of competitions and we believed that his technology could be a game-changer.
We jointly developed a model and offered to fund that plan up to a million dollars initially though Cofounders Capital with another one to two million in reserve for growth. The entrepreneur was planning to work out of our free accelerator space in Cary initially while he hired a dozen or so employees to his core team.
Everything was looking great for this entrepreneur and new venture. All that remained was for us to complete a few weeks of due diligence but that is where it all fell apart. This particular entrepreneur is from China and attending Duke on a student visa. Upon graduation he would be required to leave the U.S.
We can work around this…right? After all, who would not want a brilliant technologist with promising new innovation to apply his gifts here? Not to mention, our country would be garnering a new well-funded company and creating twelve new high paying jobs with the potential to create hundreds more. There has to be some immigration path available for someone in this situation…right?
Guess again. After talking with two different immigration attorneys I am sad to say that we have lost yet another great entrepreneur, venture, promising technology and jobs for no reason I can understand. We were told that this entrepreneur could apply for a typical work visa but that would take years and it is not merit-based. It is a lottery i.e. roll of the dice with a low change of success.
Unfortunately, this is not the first time we have experienced this disappointment. I’ve heard the same story over and over again from other angel investors and venture capitalists. Why in the world would we build a higher education system in the U.S. that attracts the best and brightest from all over the world, develop those assets even further and then kick the most promising ones out of the country?
Immigrants and immigration policy have a huge impact in the U.S. Historically, 31% of U.S. venture-backed startups have had immigrant founders and 51% of U.S companies valued at over a billion dollars today were started by immigrants. That represents a lot of jobs.
The Obama administration enacted a number of policies to make it easier for entrepreneur immigrants to bring or keep their innovation and ventures in the U.S. but according to an article in The Washington Post last year by Gene Marks most of these have been reversed by the current administration.
Immigration policy is necessary to both create and protect U.S. jobs but not in the way most people think. For those of us funding the entrepreneurial ecosystem, one thing is clear. Current U.S. immigration policy is simplistic and shortsighted. It is a hinderance to U.S. innovation and a deterrent to economic growth.