The @TWTFelipe Story – A Tale of US Visa Policy Gone Awry (#startupvisa)

Posted on Apr 4, 2010 | 85 comments


American Visa (XL)

“Staple green cards to the diplomas of foreign students who graduate from any U.S. university in math or science” (Thomas Friedman)

I’ve been meaning to write this post since September of last year when Brad Feld first wrote about the The Founders Visa Movement.  I commented briefly on his blog and made a mental note to write a blog post.  I was prompted again by Friedman’s Op Ed this weekend on immigration & jobs, which was covered by Fred Wilson (more succinctly than I am capable of).

Two weeks after Brad’s post I was at the 140 Conference in LA and I held open office hours for any entrepreneur who wanted to spend 15 minutes talking with a VC about their business.  I filled up with 20 people pretty quickly and realized this schedule was masochistic. But it turns out I met a bunch of really interesting entrepreneurs.

The one that stuck with me the longest was my chat with TWTFelipe (Felipe Coimbria).   TWTFelipe is the founder of TWTApps, who had developed some really cool add-on applications for Twitter to extend its functionality.  TWTFelipe and I ended up speaking for nearly 30 minutes and we talked mostly about why his company was based in Canada and not the US.  At the time he granted me permission to write about his story.  I hope that didn’t have a stature of limitation! ;-)

Felipe grew up in Brazil.  He came to the United States in 2001 to study Software Engineering at Auburn University.  In 2005 he was graduated and took a job in South Carolina working for technology company while he started his own web design company on the side.  He made some mistakes on his immigration paperwork so he was forced to leave the country for 8 months.  He spent a bunch of this time in Canada. By 2006 he had received proper authorization to move back to the US to join a company in the town I grew up in: Sacramento, California.

But TWTFelipe is an entrepreneur.  He started another company on the side while he was working during the day at a technology company.  His new company was called YowTrip and he wanted to work on it full time.  But in the US your immigration is tied to your employment with another company so if you want to create a new company (read: create jobs) you cannot easily do so.  So he decided to start his company in Canada.  He applied for the necessary immigration papers to run his company in Canada.

While he was waiting for the paperwork to be reviewed he moved to Boulder, Colorado and took a job with a local tech company there.  He told me that at the time he still held out hopes of being able to start a company in the US.  As a technologist he felt the US was “ground zero” for technology innovation.  But it wasn’t meant to be.  TWTFelipe moved to Montreal, Canada.  Naturally he is happy there and probably has few regrets.  But I have some.  TWTFelipe and everybody like him who want to start high-tech, green tech or other scientific companies in the US should be encouraged to do so.

That is the reason I am so supportive of the Startup Visa movement that has been so successfully championed by Brad Feld, Dave McClure, Eric Ries, Shervin Pishevar and many others.

I know all of this from first hand experience.  At my first company, BuildOnline, we were based in the UK and decided to open US offices (read: create US jobs) but as the CEO I couldn’t leave our HQ.  So I asked our COO, Stuart Lander (a Brit) to set up operations for us.  Eventually he got paperwork to do so, but it was ridiculously long and riddled with red tape.  We then moved our CFO, David Lapter, to the US.  Again, much red tape even though David grew up in the US (he had since moved to Europe and married a wonderful woman from Romania).  We then moved our Chief Software Architect over.  He’s South African.  More red tape.

I felt frustrated because I saw economic possibilities in our US expansion but it was riddled with all sorts of difficulties and complexities.  By 2005 I had moved back to the US and we started hiring US employees (The first two employees we hired had both grown up in India!  Irony, hey?).  In 2006 we sold the company to a French services company.  I wanted several of the software engineers to join me at our next startup but their employment was tied to BuildOnline.  We had the consent of the acquiring company to take them yet US regulation prohibited it.  So BuildOnline kept the employees on their books and they did subcontracting work for our company, Koral.  Hrrmph.

In 2007 Salesforce.com wanted to buy Koral.  You can imagine the complexities.  They wanted to employ our entire team post acquisition.  But two of our employees were tied to BuildOnline’s visa and four of our employees were in the UK.  I won’t bore you with the details but the deal almost didn’t go through as a result of immigration hassles and it took a full 2 years for all of the employees to become proper employees of Salesforce.com in the US.

So immigration policy has always been top of mind for me.  Not least of which because my father immigrated to the US in the 1960’s for his residency program of medical school.  When he had finished the program the US wanted more doctors due to the Vietnam War.  My Dad was drafted into the Air Force and was given accelerated citizenship.  While many doctors went to Vietnam my father was a pediatrician and they needed those in the US.  He was fortunate.  It seemed that back then the US government recognized the importance of attracting the best and brightest from around the world.  My dad’s father fled Jewish oppression in Eastern Europe as a teenager and ended up in South America.  Immigration and multiculturalism were always top of mind in my household.

So I was intrigued when I read Thomas Friedmans’s Op Ed in December 2008 about the need to Reboot America.  The world had just gone into crisis and I was in a period of reflection reminiscent of September 2001.  Friedman said,

[we have] “immigration policies that have our colleges educating the world’s best scientists and engineers and then, when these foreigners graduate, instead of stapling green cards to their diplomas, we order them to go home and start companies to compete against ours.”

January 2009 where he said in a column on Tax Cuts for Teachers:

“One of the smartest stimulus moves we could make would be to eliminate federal income taxes on all public schoolteachers so more talented people would choose these careers. I’d also double the salaries of all highly qualified math and science teachers, staple green cards to the diplomas of foreign students who graduate from any U.S. university in math or science — instead of subsidizing their educations and then sending them home”

Crazy, huh?  Subsidize their education and then send them home.  He covered the topic again in June 2009 titled Invent, Invent, Invent.  He stated:

“China is also courting trouble. Recently — in the name of censoring pornography — China blocked access to Google and demanded that computers sold in China come supplied with an Internet nanny filter called Green Dam Youth Escort, starting July 1. Green Dam can also be used to block politics, not just Playboy. Once you start censoring the Web, you restrict the ability to imagine and innovate. You are telling young Chinese that if they really want to explore, they need to go abroad.

We should be taking advantage. Now is when we should be stapling a green card to the diploma of any foreign student who earns an advanced degree at any U.S. university, and we should be ending all H-1B visa restrictions on knowledge workers who want to come here. They would invent many more jobs than they would supplant. The world’s best brains are on sale. Let’s buy more!”

Friedman again in this weekend’s (Apr 3, 2010) NYTimes:

“Between 1980 and 2005, virtually all net new jobs created in the U.S. were created by firms that were 5 years old or less,” said Litan. “That is about 40 million jobs. That means the established firms created no new net jobs during that period. … Good-paying jobs don’t come from bailouts. They come from start-ups. And where do start-ups come from? They come from smart, creative, inspired risk-takers. How do we get more of those? There are only two ways: grow more by improving our schools or import more by recruiting talented immigrants. Surely, we need to do both, and we need to start by breaking the deadlock in Congress over immigration, so we can develop a much more strategic approach to attracting more of the world’s creative risk-takers. “Roughly 25 percent of successful high-tech start-ups over the last decade were founded or co-founded by immigrants,” said Litan. Think Sergey Brin, the Russian-born co-founder of Google, or Vinod Khosla, the India-born co-founder of Sun Microsystems.

I was fortunate enough to spend 2 hours with Thomas Friedman in a group of about 15 people at UCSB last year discussing green tech, clean tech and immigration.  I guess you could tell by my quotes that I’m a big fan (by the way, if you never read From Beirut to Jerusalem and want a better understanding of Middle East politics you should absolutely read this book).  What I love about Friedman is that he’s neither “left” or “right” on issues.  OK, he’s usually RIGHT, but not “right.”  He didn’t mince words in our discussion.  He stated clearly that the US is F’d up on immigration and both parties are fighting it.

Contrast that with my very disappointing meeting with Barbara Boxer last year.  It was also in a group of about 15 people in law offices in Los Angeles.  I asked her about how we could streamline the H1-B visa process for the best foreign entrepreneurs to start companies in California (this was before Brad ignited the whole Startup Visa movement).  Her response?

“Well, I’d be for anything that helps but doesn’t weaken the positions of our existing citizens in California who are looking for work.”

Such bullshit.  Uh, Ms. Boxer, go read Friedman. “Good-paying jobs don’t come from bailouts. They come from start-ups …25 percent of successful high-tech start-ups over the last decade were founded or co-founded by immigrants.”

I won’t be voting for Boxer or any other candidate that hedges this issue in an attempt to “not alienating their base.”  I’m tired of politicians at the edges talking to the fringe voters to win primary elections.  We need to create jobs in this country.  We need to be positioned long-term in the US against countries that are hungry to compete with us on creating the next generation of startup technology companies.  I certainly don’t want the next generation of iPad-like innovation to come “with an Internet nanny filter called Green Dam Youth Escort.”  Do you?

  • http://twitter.com/nickgiglia Nick Giglia

    Anytime, Mark. Great great piece.

  • http://twitter.com/nickgiglia Nick Giglia

    Anytime, Mark. Great great piece.

  • http://prime-elite.com/ Brennan

    I see the way we are doing things now as essentially educating these people with a first-class education and then telling them to go away. This makes these very qualified people start companies in their country that provide jobs there and put the U.S. further behind. Obama needs to start focusing completely on jobs and the economy including this issue, if he does that it will make a lot of his other problems go away. Congress needs to quit thinking short-term and hurting our country for the long-term from the start-up VISA issue to the financial reform issue which hurts VC's and start-up's plus does nothing to stop the credit default swaps that got us into trouble in the first place.

  • http://prime-elite.com/ Brennan

    I see the way we are doing things now as essentially educating these people with a first-class education and then telling them to go away. This makes these very qualified people start companies in their country that provide jobs there and put the U.S. further behind. Obama needs to start focusing completely on jobs and the economy including this issue, if he does that it will make a lot of his other problems go away. Congress needs to quit thinking short-term and hurting our country for the long-term from the start-up VISA issue to the financial reform issue which hurts VC's and start-up's plus does nothing to stop the credit default swaps that got us into trouble in the first place.

  • http://www.improffice.com EduardoF

    Great article that shows the dire situation many foreign-born aspiring entrepreneurs find ourselves in. I came to the US two years ago for grad school and I have been working for a large company since graduation last year, but I've always wanted to create my own business. I obtained a loan and I have saved enough money to bootstrap my company. However, working for my own business legally is so difficult that I am considering moving back to Spain. My girlfriend is in a similar situation, she's a mechanical engineer and I'm an electrical engineer.

  • EduardoF

    Great article that shows the dire situation many foreign-born aspiring entrepreneurs find ourselves in. I came to the US two years ago for grad school and I have been working for a large company since graduation last year, but I've always wanted to create my own business. I obtained a loan and I have saved enough money to bootstrap my company. However, working for my own business legally is so difficult that I am considering moving back to Spain. My girlfriend is in a similar situation, she's a mechanical engineer and I'm an electrical engineer.

  • http://bothsidesofthetable.com msuster

    Thank you, Eduardo. Exactly the kind of situation I'm talking about. I hope it works out for you.

  • http://bothsidesofthetable.com msuster

    Thank you, Eduardo. Exactly the kind of situation I'm talking about. I hope it works out for you.

  • http://bothsidesofthetable.com msuster

    Exactly.

  • http://bothsidesofthetable.com msuster

    Exactly.

  • http://richineverysense.blogspot.com/ scheng1

    This is the part where Singapore government does it right. The government offers in-principle approval to all final year tertiary students.
    The moment they graduate and find a job, they become permanent resident.

  • http://richineverysense.blogspot.com/ scheng1

    This is the part where Singapore government does it right. The government offers in-principle approval to all final year tertiary students.
    The moment they graduate and find a job, they become permanent resident.

  • TK

    Mark
    Countries like India have learnt from US to reverse their “brain drain”. A great article on NYT op-edby Tom Friedman recently was this: http://www.nytimes.com/2010/03/21/opinion/21fri

    great blog

  • TK

    Mark
    Countries like India have learnt from US to reverse their “brain drain”. A great article on NYT op-edby Tom Friedman recently was this: http://www.nytimes.com/2010/03/21/opinion/21fri

    great blog

  • http://terezan.tumblr.com/ Tereza

    Hey Mark, I'm totally with you on the Startup Visa thing, and really appreciate Felipe's story (Montreal's gain, our loss).

    There is another story about labor and startups, in some ways smaller and some ways bigger than immigrant visas, which I've been wanting to raise somewhere….so here you go.

    It's childcare.

    There are not as many technical women in this country as we could/should have. But there are talents which can contribute mightily in startup land. And 80% of women work or want to.

    I'm not sure what the solution is, and not sure I want to pay tax-wise for a comprehensive childcare policy.

    But I do know I'm paying through the nose to have my kids cared for while I pursue startup-land. I'm lucky to have had savings to dip into to do it. That savings won't last forever — and it's money I'm not putting into my company, but would've if I could've.

    A lot of women I know have wound up under-employed in jobs that keep the family insured. The new health plan may help part of this but the other side of that equation, for women, is childcare.

  • http://terezan.tumblr.com/ Tereza

    Hey Mark, I'm totally with you on the Startup Visa thing, and really appreciate Felipe's story (Montreal's gain, our loss).

    There is another story about labor and startups, in some ways smaller and some ways bigger than immigrant visas, which I've been wanting to raise somewhere….so here you go.

    It's childcare.

    There are not as many technical women in this country as we could/should have. But there are talents which can contribute mightily in startup land. And 80% of women work or want to.

    I'm not sure what the solution is, and not sure I want to pay tax-wise for a comprehensive childcare policy.

    But I do know I'm paying through the nose to have my kids cared for while I pursue startup-land. I'm lucky to have had savings to dip into to do it. That savings won't last forever — and it's money I'm not putting into my company, but would've if I could've.

    A lot of women I know have wound up under-employed in jobs that keep the family insured. The new health plan may help part of this but the other side of that equation, for women, is childcare.

  • http://twitter.com/twtfelipe Felipe Coimbra

    Have you been to Canada before? Speak French? (Not required but helps) With a master degree you can probably get permanent residency here in less than a year (like I did) and be able to start your own business. The process is simple, you can file on your own, no lawyers needed.

  • http://twitter.com/twtfelipe Felipe Coimbra

    Have you been to Canada before? Speak French? (Not required but helps) With a master degree you can probably get permanent residency here in less than a year (like I did) and be able to start your own business. The process is simple, you can file on your own, no lawyers needed.

  • http://www.improffice.com EduardoF

    Thanks Felipe, but I've decided to give it a try here. I'm looking for a lawyer but it looks like I can start and work for my own company on an F1 visa (unlike on H1-B). If I get into trouble I'll just go back to Spain, it's sunny over there and as an entrepreneur I hope I won't have to care about the high unemployment rate :)

  • http://eduardolog.com/ EduardoF

    Thanks Felipe, but I've decided to give it a try here. I'm looking for a lawyer but it looks like I can start and work for my own company on an F1 visa (unlike on H1-B). If I get into trouble I'll just go back to Spain, it's sunny over there and as an entrepreneur I hope I won't have to care about the high unemployment rate :)

  • http://www.improffice.com EduardoF

    Right on. I even got a nice scholarship from my American university, so my graduate degree was a pretty good deal. If I start my company in Spain instead of the US, the taxpayer here won't get anything back from that scholarship.

  • http://eduardolog.com/ EduardoF

    Right on. I even got a nice scholarship from my American university, so my graduate degree was pretty good deal. If I start my company in Spain instead of the US, the taxpayer here won't get anything back from that scholarship.

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  • http://www.usadiversitylottery.com/ Green Card

    From a humanitarian perspective, our fellow human beings, who migrate to support their families, continue to suffer at the hands of immigration policies that separate them from family members and drive them into remote parts of the American desert, sometimes to their deaths. This suffering should not continue.

    Now is the time to address this pressing humanitarian issue which affects so many lives and undermines basic human dignity. Our society should no longer tolerate a status quo that perpetuates a permanent underclass of persons and benefits from their labor without offering them legal protections.

  • http://www.usadiversitylottery.com/ Green Card

    From a humanitarian perspective, our fellow human beings, who migrate to support their families, continue to suffer at the hands of immigration policies that separate them from family members and drive them into remote parts of the American desert, sometimes to their deaths. This suffering should not continue.

    Now is the time to address this pressing humanitarian issue which affects so many lives and undermines basic human dignity. Our society should no longer tolerate a status quo that perpetuates a permanent underclass of persons and benefits from their labor without offering them legal protections.

  • http://www.astramatch.com/blog pemo

    So glad to see that you are backing the Startup Visa too Mark & was really interested to read this post about the challenges you had faced. It is such a challenge in the UK & Ireland with a very conservative business background to get venture or even serious interest in technology businesses. I wrote a post too supporting the Startup Visa @ http://www.ezebis.com/venture/why-the-startup-v… I pitched at TheFunded.com Showcase in January and all the entrepreneurs that were pitching were foreign origin??? However I was the only one that had come directly from another country for the event.

  • http://www.astramatch.com/blog pemo

    So glad to see that you are backing the Startup Visa too Mark & was really interested to read this post about the challenges you had faced. It is such a challenge in the UK & Ireland with a very conservative business background to get venture or even serious interest in technology businesses. I wrote a post too supporting the Startup Visa @ http://www.ezebis.com/venture/why-the-startup-v… I pitched at TheFunded.com Showcase in January and all the entrepreneurs that were pitching were foreign origin??? However I was the only one that had come directly from another country for the event.

  • http://us-immigration-reform.org/ Immigrant kid

    It fits our needs perfectly the advantage of immigration reform on the country: Greater supply of unskilled workers, a younger workforce, and skilled workers in needed sectors. But there is also a disadvantage of immigration reform like Greater poverty, more educational cost, lower unskilled wage levels, and increased danger of terrorism. Thanks to the post!

  • http://us-immigration-reform.org/ Immigrant kid

    It fits our needs perfectly the advantage of immigration reform on the country: Greater supply of unskilled workers, a younger workforce, and skilled workers in needed sectors. But there is also a disadvantage of immigration reform like Greater poverty, more educational cost, lower unskilled wage levels, and increased danger of terrorism. Thanks to the post!

  • nitaupadhye

    Thank you for your interesting post. As an American lawyer practicing US immigration law in London I strongly support comprehensive immigration reform to change our dysfunctional immigration system. The wealth of foreign talent seeking entry into the US is staggering – I see it in my office everyday – and the visa limitations do little to promote the movement of these highly skilled professionals in a timely and efficient manner.

    There are a few visa categories that are helpful, although not necessarily right on target: The E-2 treaty trade/treaty investor visa allows investors to establish a new business in the US provided they invest substantial funds, the investment is not marginal, and a requisite treaty of trade exists. The regulations unfortunately aren’t quite suited to a bright entrepreneur whose initial access to investment capital is limited. The other option may be an H-1B visa. It is possible to set up a business on an H-1B visa –the regulations do allow for it, but it is not a quick, easy or flexible solution. There is also the EB-5 immigrant investor visa but individuals must have at least $500,000 available to invest and given the restrictions on how the funds can be invested, it isn’t suited to the high-tech start-up scenario.

    The Foreign Affairs Manual [9 FAM 41.31 N5] states: “The police of the US Government is to facilitate and promote international travel and the free movement of people of all nationalities to the United States both for cultural and social value to the world and for economic purposes.” Unfortunately this policy is not in the forefront of the government’s mind at the moment and it will be quite some time before we see green cards stapled on to anyone’s diploma, but there are “work-around” solutions and US immigration options still do exist.

  • nitaupadhye

    Thank you for your interesting post. As an American lawyer practicing US immigration law in London I strongly support comprehensive immigration reform to change our dysfunctional immigration system. The wealth of foreign talent seeking entry into the US is staggering – I see it in my office everyday – and the visa limitations do little to promote the movement of these highly skilled professionals in a timely and efficient manner.

    There are a few visa categories that are helpful, although not necessarily right on target: The E-2 treaty trade/treaty investor visa allows investors to establish a new business in the US provided they invest substantial funds, the investment is not marginal, and a requisite treaty of trade exists. The regulations unfortunately aren’t quite suited to a bright entrepreneur whose initial access to investment capital is limited. The other option may be an H-1B visa. It is possible to set up a business on an H-1B visa –the regulations do allow for it, but it is not a quick, easy or flexible solution. There is also the EB-5 immigrant investor visa but individuals must have at least $500,000 available to invest and given the restrictions on how the funds can be invested, it isn’t suited to the high-tech start-up scenario.

    The Foreign Affairs Manual [9 FAM 41.31 N5] states: “The police of the US Government is to facilitate and promote international travel and the free movement of people of all nationalities to the United States both for cultural and social value to the world and for economic purposes.” Unfortunately this policy is not in the forefront of the government’s mind at the moment and it will be quite some time before we see green cards stapled on to anyone’s diploma, but there are “work-around” solutions and US immigration options still do exist.

  • garydpdx

    Actually, TK, your Friedman citation was not related to 'reverse brain drain', a phrase that has become common in Silicon Valley and elsewhere. A lot of people are repatriating to India or China when they would have been pursuing regular immigration to the US. On trips to India, I have met many people who became naturalized citizens of the US, UK, or Canada but their career paths took them back to their homeland (often living in Orange County-style suburbs that have emerged to attract 'overseas' Indians). A lot of layoffs didn't happen in the recent Great Recession because the same person whose job was eliminated in the US follows their position home to India or China, doing it back there.

  • garydpdx

    Actually, TK, your Friedman citation was not related to 'reverse brain drain', a phrase that has become common in Silicon Valley and elsewhere. A lot of people are repatriating to India or China when they would have been pursuing regular immigration to the US. On trips to India, I have met many people who became naturalized citizens of the US, UK, or Canada but their career paths took them back to their homeland (often living in Orange County-style suburbs that have emerged to attract 'overseas' Indians). A lot of layoffs didn't happen in the recent Great Recession because the same person whose job was eliminated in the US follows their position home to India or China, doing it back there.

  • garydpdx

    One general comment, one concern that I have had since reading the original Friedman piece on the NYT. The startup visa proposal has a 'success' requirement and if the new venture doesn't pan out, the entrepreneur gets the boot unless they start up another enterprise. Failure is always a risk in the startup world and Silicon Valley became what it (still?) is because failure is not punished … but this visa idea seems to punish failure, despite the 'recoup' provision. Your impressions?

  • garydpdx

    One general comment, one concern that I have had since reading the original Friedman piece on the NYT. The startup visa proposal has a 'success' requirement and if the new venture doesn't pan out, the entrepreneur gets the boot unless they start up another enterprise. Failure is always a risk in the startup world and Silicon Valley became what it (still?) is because failure is not punished … but this visa idea seems to punish failure, despite the 'recoup' provision. Your impressions?