RESEARCH TRIANGLE PARK – Politicians looking to spark economic growth in the wake of the COVID-19 pandemic should consider immigration reform, says the trade group for venture capitalists.
In a new report, the National Venture Capital Association, says current policy “is not working.”
“Foreign-born entrepreneurs play a critical role in the creation of U.S. VC-backed startups, and our country needs new entrepreneurial energy to recover from the pandemic,” said Bobby Franklin, CEO of NVCA. “Our new report details how key immigration policy reforms such as a Startup Visa, H-1B reform, and implementation of the International Entrepreneur Rule would spur a wave of new company formation and job creation across the country that would help the economy reach new heights in innovation and economic growth.”
The report is titled Immigrant Entrepreneurs Can Drive Economic Growth in the Pandemic Recovery.
Key takeaways of the report, according to the NVCA, are:
- Immigrant founders play a key role in the creation of new companies. One-third of U.S. venture capital-companies that went public between 2006 and 2012 had at least one immigrant founder. 44% of Fortune 500 companies (219 companies) were founded by immigrants or their children. And 60% of the most highly valued U.S. tech companies were founded by first- or second-generation Americans, accounting for 1.9 million employees.
- A Startup Visa is needed to create new jobs and maintain U.S. competitiveness. Congress can inject new entrepreneurial energy into the economy through the creation of a Startup Visa, which has drawn bipartisan support for many years. The creation of 75,000 Startup Visas could create at least 1.6 million new jobs over a ten-year period. A Startup Visa will help America continue to be a global technology leader and the preferred location to launch business in an increasingly competitive global economic landscape in which many other nations already boast their own startup visas.
- U.S. Immigration policy is not working for entrepreneurship. A Startup Visa is necessary because there is currently no visa category designed for foreign entrepreneurs who want to found companies in the U.S. and deliver all the benefits of new company formation to our country. Other visa categories—such as H-1B, O-1A, or E-2 visas—are not designed for immigrant founders, and their limitations delay or even exclude foreign-born entrepreneurs from founding companies in the U.S.
- H-1B reforms will also support American entrepreneurship and startup activity. While H-1B visas are not ideal for immigrants who want to immediately found companies in the U.S., they are still critically important for the success of immigrant founded companies because they provide valuable work experience and widen the pipeline of potential immigrant startup founders. Raising the annual cap of H-1B visas issued each year is fundamental to generating more successful immigrant founded companies.
You can download the report here.